Lifespan Acquisition of Major Physician Group Takes Them Off Tax Roll - GoLocalProv

Thursday, April 29, 2021

GoLocalProv News Team

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Lifespan in another mega-merger

It is official — Lifespan has gobbled up one of the largest physician groups in Rhode Island with little attention.

Lifespan, the largest hospital group in the state, has now acquired Coastal Medical in a deal the two healthcare entities have been working on for over a year.  

Lifespan is also trying to finalize a merger with Care New England -- the state's second-largest hospital group. 

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From For-Profit to Non-Profit

The deal takes the for-profit off the tax roll according to multiple sources and documents filed with the state over a year ago.

The acquisition of Coastal Medical by Lifespan seems to skirt the state's regulatory structure as one is a hospital group and the other is a practice. Thus, there is no merger review as in the case of hospitals.

Attorney General Peter Neronha, whose wife is a long-time physician at Coastal, has refused to respond to questions about the merger and if it should be refused due to the size of the two entities, as Coastal is the largest primary care group in the state. 

In February of 2020, the RI Corporations database show that the Coastal deal was in the works. Lifespan's chief legal counsel Paul Adler filed for the creation of a new corporate entity "Coastal Medical Physicians, Inc." and the directors included top players from each organization and creates the new corporate entity as a not-for-profit.

DIRECTOR    G. ALAN KUROSE M.D.    10 DAVOL SQUARE, SUITE 400 PROVIDENCE, RI 02903 USA

DIRECTOR    TIMOTHY BABINEAU M.D.    593 EDDY STREET PROVIDENCE, RI 02903 USA

The new entity under the filing with the Secretary of State's office states:

THE CORPORATION IS ORGANIZED AND SHALL BE OPERATED EXCLUSIVELY FOR CHARITABLE, SCIENTIFIC AND EDUCATIONAL PURPOSES WITHIN THE MEANING OF SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). THE CORPORATION IS FURTHER ORGANIZED TO PROVIDE ACCOUNTABLE PATIENT-CENTERED, HIGH QUALITY, EFFICIENT, VALUE-BASED AND INNOVATIVE CARE TO SERVE THE HEALTH CARE NEEDS OF THE COMMUNITIES IN RHODE ISLAND AND ELSEWHERE, INCLUDING THOSE SERVED BY THE HOSPITALS AFFILIATED WITH LIFESPAN CORPORATION ("LIFESPAN"), AND TO PROMOTE AND ADVANCE MEDICAL RESEARCH, EDUCATION AND TRAINING IN MEDICINE, MEDICAL RELATED SCIENCES AND CLINICAL PRACTICE.

IN ELABORATION OF SUCH MISSION, THE CORPORATION IS ESTABLISHED FOR THE BENEFIT OF AND TO SUPPORT THE TEACHING, RESEARCH AND PATIENT CARE MISSIONS OF RHODE ISLAND HOSPITAL ("RIH"), THE MIRIAM HOSPITAL ("TMH"), OTHER LIFESPAN AFFILIATED HOSPITALS, AND THE ALPERT MEDICAL SCHOOL OF BROWN UNIVERSITY. RIH, TMH, AND SUCH OTHER LIFESPAN AFFILIATED HOSPITALS ARE REFERRED TO COLLECTIVELY AS THE "HOSPITALS."

IN FURTHERANCE OF AND NOT IN LIMITATION OF THE FOREGOING PURPOSES, THE CORPORATION MAY ENGAGE IN ANY OTHER LAWFUL ACTIVITY THAT MAY BE CARRIED OUT BY A CORPORATION FORMED UNDER SECTION 7-6 OF THE GENERAL LAWS OF RHODE ISLAND, AS NOW WRITTEN OR HEREAFTER AMENDED, WHICH IS NOT INCONSISTENT WITH SECTION 501(C)(3) OF THE CODE, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.

"Coastal is now the largest primary care group practice in Rhode Island, serving over 120,000 patients in 20 convenient offices state-wide. The Coastal team is comprised of more than 125 providers, (physicians, NPs, and PAs) and growing, complemented by more than 500 support staff," said Coastal's website prior to the agreement.

The companies claim in the announcement, "The two organizations have a long history of successful collaboration in caring for patients. Coastal is a national model for coordinated primary care, while Lifespan offers complementary strengths in specialty services, research, and education. Combining Lifespan's vast specialty care capabilities with Coastal's primary care expertise will benefit patients across the state, offering enhanced value through a continuum of coordinated, high-quality patient care."

Major Impact to Healthcare in RI -- Lifespan Gets Bigger and Bigger

"Coastal shares Lifespan's commitment to Rhode Island, fostering innovation and ensuring value, to deliver excellence in care," said Alan Kurose, M.D., Coastal President and CEO. "As part of the Lifespan system, our practices and providers will help reach more patients, with a positive impact on healthcare. This is good for Rhode Island, the people who live here, and the quality and cost of health care."  

"Bringing together these two organizations will be transformative for healthcare in our state," said Timothy J. Babineau, M.D., Lifespan President and CEO. "Coastal has a national reputation for delivering high quality, patient-centered care that has made a powerful impact on the health of our community.  With Coastal, Lifespan can accelerate its journey to provide more value based care, which will advance quality, increase access and ensure patients receive care in the most appropriate setting. This is an exciting time in healthcare and we are truly pleased to welcome our colleagues from Coastal to the Lifespan team."

Lifespan's spokesperson did not respond to questions about the impact of the merger.

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