Massena interim MMH management contract with SLHS makes them sole potential affiliate
Friday, March 29, 2019 - 1:39 pm

Updated 4 p.m. April 1 to include section detailing that the letter prohibits the town from discussing any affiliation or sale with the new MMH non-profit board.

BY ANDY GARDNER
North Country This Week

MASSENA -- The letter of intent the Town of Massena signed with St. Lawrence Health System is an interim management agreement that makes SLHS the sole potential affiliate for Massena Memorial Hospital.

The Town Council signed the letter in an executive session on Tuesday, March 26. Afterward, Town Supervisor Steve O’Shaughnessy and councilors Sam Carbone, Melanie Cunningham and Al Nicola refused to say what they voted on or how members voted. Councilor Tom Miller was absent from the vote.

The letter of intent is dated March 25 and signed by SLHS CEO David Acker. It has two spaces for MMH board chair Loretta Perez to sign her name and for O’Shaughnessy to sign his.

O’Shaughnessy at the Monday, March 25 MMH Board of Managers meeting said he only had seen a “draft” letter of intent from Acker that was sent in November. Scott Wilson, former MMH board chair, spoke up at the March 27 Town Council meeting and said he never saw the letter before O’Shaughnessy opted to not reappoint him and his term expired Dec. 31.

The letter says the Town of Massena will not “discuss, entertain, solicit from or negotiate with any other party (including, without limitation Massena Memorial Hospital, Inc., a New York not-for-profit corporation ("MMH") regarding: (i) the sale, lease or management of the assets or operations of the Hospital, (ii) any reorganization, merger, consolidation, member substitution or joint venture involving the Hospital or (iii) any other transaction or series of transactions in which a third party would acquire the right to control all or any of the Hospital.”

It also dictates that the town will “Use best efforts to prevent (i) the sale, lease or management of the assets or operations of MMH, (ii) any reorganization, merger, consolidation, member substitution or joint venture involving MMH or (iii) any other transaction or series of transactions in which a third party would acquire the right to control MMH.”

The letter includes a confidentiality and non-disclosure clause that bars both Massena and SLHS from discussing it with anyone except the Department of Health. It also says SLHS can talk about it with the health network with whom they have a pending affiliation, Rochester Regional Health.

Members of the Town Council at their Wednesday meeting refused to answer even basic questions from the public and press about their deal with SLHS.

It also restricts the town from discussing with the new Massena Memorial Hospital Inc. non-profit board "the sale, lease or management of the assets or operations of the Hospital, any reorganization, merger, consolidation, member substitution or joint venture involving the Hospital or any other transaction or series of transactions in which a third party would acquire the right to control all or any of the Hospital."

The letter calls for both Massena and SLHS to develop stock answers to public questions about the deal.

“The parties will work together in good faith to develop a communication plan regarding the transactions contemplated by this [letter of intent], including the development of ‘talking points’ for public disclosures,” the letter says. “The parties acknowledge public disclosures of Confidential Information … may occur.”

The letter also enters Massena into an interim management agreement for Massena Memorial with SLHS, pending the outcome of a financial assessment of MMH conducted and paid for by the SLHS, the potential affiliate.

“SLHS will enter an interim management agreement, document terms and conditions agreed upon by all of the parties, whereby SLHS will provide certain administrative and management services to the Hospital during the period between the start of the Assessment and the sooner of (a) the closing of the transaction contemplated under the Potential Proposal or (b) the termination of discussions between the parties with respect to the Potential Proposal,” the letter reads.

Following the financial assessment, the letter says SLHS wants a draft affiliation proposal to include four elements: “Conversion of the Hospital to a private, non-profit operation that qualifies as tax exempt under Section 501c3 of the Internal Revenue Code”; “Creation of a governing board consisting predominantly of residents of the Hospital service area”; “Continuation of significant health care services at the Hospital”; and “Establishment of a sustainable operating model.”

The draft says SLHS will pay the cost of the financial analysis, and otherwise “each party will bear its own legal, accounting and other expenses and costs.”

The complete letter of intent can be read here.