Hartford HealthCare backs off merger plan, blames state cuts

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HARTFORD — Hartford HealthCare has broken off merger talks with Day Kimball Healthcare, blaming Gov. Dannel P. Malloy’s plan to cut Medicaid reimbursement payments.

The groups had announced in July they were exploring an affiliation. The merger would have had the 122-bed Day Kimball Hospital in Putnam join the network that includes Hartford, Backus and Windham hospitals, MidState Medical Center and The Hospital of Central Connecticut.

Day Kimball Healthcare employs roughly 1,100 people, between the hospital and its satellite facilities. The board of directors has been evaluating over the last couple of years how best to position the organization to fit into another larger health care system.

“We had progressed to a letter of intent with the expectation would be working toward a formal agreement, by which we would merge with Hartford Healthcare,” said Robert Smanik, president and CEO of Day Kimball Healthcare.

For now, that deal with Hartford Healthcare has been suspended, but Day Kimball isn’t sitting idly by.

“We are actually beginning talk with others to see what interest there may be in Day Kimball fitting into a system,” said Smanik. And, at this critical juncture, they are moving rapidly.

However, closing the hospital and its satellite facilities is not out of the question, he adds.

“The board, over time, as had some reserves set aside that will assist us through these difficult times, but the next 12 to 24 months are critical,” said Smanik.

The Malloy administration announced last month it was planning more than $102 million in budget cuts to keep the state’s $20 billion budget in balance. About $63.4 million would come from the Department of Social Services in the form of state Medicaid payments to hospitals.

Hartford HealthCare says because of the cuts, it can’t afford a major capital expenditure at this time.