The effort to transfer control of Maimonides Medical Center to NYC Health + Hospitals has encountered yet another obstacle, dealing a fresh blow to a transaction that has already faced mounting legal and regulatory challenges.

Sources with knowledge of the process say the New York State Department of Health recently rejected Maimonides’ newest filing seeking approval of the proposed acquisition after determining that the hospital had not submitted a mandatory Health Equity Impact Assessment (HEIA).

The setback surfaced just as Maimonides officials were anticipating review of the transaction by the Establishment and Project Review Committee of the Public Health and Health Planning Council. When the committee’s agenda for its June 10 meeting was published, however, the proposed takeover was notably absent.

The latest development comes on the heels of a major legal ruling issued last month that significantly complicated the path forward for both Maimonides and NYC Health + Hospitals.

On May 12, Albany Supreme Court Justice Denise Hartman invalidated the Department of Health’s earlier approval of the $2.245 billion deal, finding that regulators allowed the transaction to move ahead without completing the review procedures required under state law.

That court challenge was filed by Refuah Helpline, several Borough Park kehillos, and neighborhood residents who contended that the takeover could materially affect healthcare services relied upon by Brooklyn communities.

A central issue in the current dispute is compliance with the Health Equity Impact Assessment requirement, a provision enacted by New York State in 2023. The law requires a comprehensive independent review of major healthcare transactions to evaluate their potential effects on access to medical care, healthcare disparities, and vulnerable or underserved populations.

Opponents of the transaction maintain that such scrutiny is essential given Maimonides’ role as one of Brooklyn’s most important healthcare institutions, serving hundreds of thousands of patients, including the large Orthodox Jewish population of Borough Park and neighboring communities.

The hospital treats a patient base heavily dependent on Medicare and Medicaid and is home to Brooklyn’s only full-service children’s hospital and Pediatric Trauma Center.

Attorneys representing the petitioners argue that the recent court decision leaves little room for interpretation, making clear that the acquisition cannot move forward unless a HEIA is completed and the proposal undergoes a full review by the Public Health and Health Planning Council.

The latest delay could significantly alter the timetable for the transaction. The Establishment and Project Review Committee is not scheduled to convene again until August 27, and healthcare observers note that conducting a thorough, independent health-equity assessment often requires extensive research, community participation, and detailed analysis.

The proposed acquisition also remains entangled in additional legal disputes.

A separate lawsuit brought by seven members of Maimonides’ board of trustees is still pending in Kings County Supreme Court. The suit alleges that hospital leadership failed to adequately evaluate alternative options before pursuing the transaction.

Meanwhile, the Charities Bureau of the New York Attorney General’s Office has refused to authorize the transfer of Maimonides’ nonprofit assets without judicial oversight, adding another layer of uncertainty to the process.

Hospital officials and NYC Health + Hospitals had originally projected that the transaction would be completed by April 1, 2026, a target date repeatedly cited by leaders of both organizations. More than two months after that deadline, the proposal remains mired in litigation, regulatory scrutiny, and unresolved questions.

{Matzav.com}