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Judge, Coakley tangle over Partners deal

Talk of politics brings sharp reply; court may call on AG-elect Healey

A Suffolk Superior Court judge on Monday suggested that Attorney General Martha Coakley’s gubernatorial ambitions may have played a role in the expansion plan negotiated with Partners HealthCare, and said she might consult with the incoming attorney general, Maura Healey, before ruling.

The comments from Judge Janet L. Sanders, near the end of a daylong hearing, provoked a tense exchange with Coakley, a Democrat, who just lost a tight election to Charlie Baker, the Republican governor-elect.

“I want to be clear that the decisions that we made had nothing to do with whether I was running again for attorney general, or whatever office I was seeking, because the court seems to be suggesting otherwise,” Coakley said.

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“I didn’t mean in any way to impugn your integrity,” Sanders responded.

“Well I think you have, your honor,” Coakley shot back.

The exchange culminated a day of pointed questions from Sanders as she expressed skepticism about a settlement that would allow Partners, the state’s biggest health system, to acquire three community hospitals. Sanders gave no indication on when she might rule on the deal, which has the potential to reshape the state’s health care industry, but said she might wait for Healey to take office in January.

“This [deal] is going to be here for 10 years,” Sanders said. “It’s going to have enormous impact for the citizens of our Commonwealth. Surely we should make sure that the incoming attorney general is behind this.”

Healey declined to comment.

Coakley and Partners finalized the settlement about six months ago, capping a five-year investigation by the attorney general’s office and federal officials into Boston-based Partners’ market practices. If approved by Sanders, the settlement would allow Partners to acquire South Shore Hospital in Weymouth and Hallmark Health System’s hospitals in Medford and Melrose, while imposing price caps and putting limits on Partners’ growth and contracting practices.

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Partners argues the mergers will help it deliver care more efficiently in settings outside its big Boston teaching hospitals, and at lower costs. The health system’s lawyers have asked the judge to decide if the settlement is reasonable, and not whether it fixes all the problems of the local health care industry.

“It’s been a long day,” Partners’ general counsel, Brent Henry, told reporters after the proceedings. “We’re all going to just wait to hear what the judge has to say at this point.”

The settlement is fiercely opposed by a group of Partners’ competitors, as well as antitrust specialists, academics, consumer advocates, and business groups. The Health Policy Commission, a state watchdog agency, has said Partners’ further expansion could raise costs and thwart competition.

A lawyer for a coalition of competitor hospitals, Andrea Agathoklis Murino, said the settlement fails to resolve the anticompetitive effects of Partners’ proposed acquisitions. “The only thing this guarantees is Partners will be bigger and stronger than it is today,” she told the judge.

Sanders raised doubts that the settlement would be a sufficient antidote to the increased market power that Partners would gain by acquiring three more hospitals. Partners already operates a system of 10 hospitals with some 6,000 doctors.

Sanders quoted frequently from public comments filed in opposition to the deal as she grilled lawyers from Partners and the attorney general’s office during Monday’s hearing.

How does Partners set its prices? she asked. How does it negotiate with insurance companies? How does it measure its expenses? How will the deal be enforced?

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“This is a very public issue, with very public ramifications,” Sanders said. “This is probably the biggest issue I’ve ever had before me.”

The judge asked how effective the proposed price caps would be, given that they expire in 6½ years. The deal limits Partners’ price increases to the rate of inflation over that period. After the cap expires, “What’s to say they don’t recoup all their losses?” Sanders asked. “If they recoup all the money, what have you gotten at the end of the day?”

She also questioned what impact Coakley’s decision to run for governor may have had on the agreement.

“There is kind of an unusual circumstance here,” said Sanders, who was appointed to the Superior Court in 2001 by Acting Governor Jane Swift, a Republican. “The attorney general [was] gearing up for a campaign for governor. Does that matter?”

Coakley sat in the courtroom all day, addressing Sanders only twice — the second time being when the judge raised her run for governor.

Coakley called the deal with Partners a reasonable but not perfect solution.

“Our only goal,” she said, “is to do what’s in the best interest of the Commonwealth of Massachusetts.”


Priyanka Dayal McCluskey can be reached at priyanka.mccluskey
@globe.com
. Follow her on Twitter @priyanka_dayal.