Tensions flare between R.I. hospital leaders after merger talks collapse

Rhode Island Hospital (Lane Turner/Globe Staff) The Boston Globe/Globe Staff

PROVIDENCE – The leaders of Rhode Island’s two largest hospital groups are trading barbs after talks to form an academic health center in the state fell apart last month, with Care New England’s president accusing Lifespan of retaliating against the institution by terminating a piece of a partnership at Rhode Island Hospital.

Letters written by Care New England president and chief executive James E. Fanale and Lifespan president and chief executive Timothy J. Babineau reveal an increasingly tense relationship between the two groups following Care New England’s decision to withdraw from merger discussions with Lifespan, the state’s largest hospital group, and Brown University.

Care New England, the state’s number two hospital group, operates Women & Infants, Butler Hospital, and Kent Hospital. Lifespan oversees Rhode Island Hospital, Hasbro Children’s Hospital, The Miriam Hospital, Bradley Hospital, and Newport Hospital.

In a letter written to Babineau dated July 25 and obtained by the Globe, Fanale accused Lifespan of abruptly ending its partnership with the Integra Community Care Network, an accountable care organization run by Care New England that is designed primarily to manage the heath care needs of Medicare beneficiaries.

Lifespan is not a full-fledged member of Integra, but Fanale wrote that it allowed a case manager from the organization to assist Rhode Island Hospital patients with their “long-term post-discharge care.”

“Last Monday, we were informed that this program was terminated abruptly and our case manager would no longer be allowed to assist our patients at Rhode Island Hospital,” Fanale wrote. “The reason given was that your current consulting group mandated the case managers leave. The timing of this decision seems coincident with and in retaliation to Care New England’s recent decision to exit merger discussions.”

Four days later, Babineau wrote a letter to Fanale calling Care New England’s accusation “as offensive as it is absurd.” He said the case manager in question “had not even completed orientation at Rhode Island Hospital, which is a prerequisite to work with patients.”

Babineau cited “significant operational and financial challenges this fiscal year” at Lifespan as the reason it determined a new case manager was unnecessary. He said Lifespan has engaged consulting firm Alvarez & Marsal to create a corrective action plan to address its challenges.

“Adding external personnel and processes into the hospital environment would undermine the plan to critical work that needs to be done,” Babineau wrote.

Babineau also said the decision to end the relationship with the case manager was communicated to Care New England on July 16, the same day Care New England announced it was pulling out of merger talks with Lifespan and Brown.

Spokespeople for Care New England and Lifespan declined to comment on the letters between Fanale and Babineau.

Care New England had previously agreed to merge with Massachusetts-based Partners Healthcare, but the deal was put on hold in June after Governor Gina Raimondo urged the organization to spend the summer negotiating a proposal to form a local academic health center with Lifespan and Brown. But Fanale and his board quickly withdrew from the discussion.

Care New England has faced financial turmoil in recent years – that’s one of the reasons it previously agreed to merge with Partners – but it disclosed earlier this week that it posted a $7 million profit during the third quarter of its fiscal year.

It’s unclear if talks with Partners will resume.