LANCASTER — The state Attorney General’s office is seeking to intervene in the legal disputes that have erupted over Littleton Regional Hospital’s attempt to withdraw from the four hospital affiliation it formed with Androscoggin Valley Hospital in Berlin, Weeks Medical Center in Lancaster and Upper Connecticut Valley Hospital in Colebrook.
On Feb. 19, Littleton Regional Hospital announced it would withdraw from North Country Healthcare on April 1. The largest of the four hospitals, Littleton Regional represents approximately 42 percent of North Country Healthcare according to legal documents.
Littleton Regional Hospital filed suit on April 4 in the Business and Commercial Dispute Docket in Merrimack Superior Court to force the withdrawal.
In response, a week later, North Country Healthcare and the three remaining hospitals filed a civil suit against Littleton Regional Hospital and five hospital officials in Coos County Superior Court. The suit charges the hospital with breach of contract, breach of fiduciary duty, tortious interference with contractual relationships, and fraudulent misrepresentations. It asks the court to rule that Littleton Regional has not obtained authorization sufficient to execute a withdrawal from North Country Healthcare.
The Charitable Trusts Unit of the N.H. Attorney General’s Office has now filed motions to intervene in both court cases.
“We have done so in the exercise of our general supervisory authority over charitable organizations, as well as our specific statutory responsibility with respect to transactions involving health care organizations. At this point, we do not know how matters will unfold, so we cannot comment on what further efforts the Charitable Trusts Unit may undertake,” said Kate Spiner, director of communications for the attorney general’s office.
In 2015, the four hospitals formed a non-profit parent organization, North Country Healthcare to coordinate planning, administration, purchasing, human resources, marketing, finance and contracting. The parent company would have a board of directors and be headed by a CEO and CFO. Each hospital maintained its own president, board of directors and assets.
Littleton Regional Healthcare argues the affiliation agreement allows any of the hospitals to withdraw during a 90-day period following the third anniversary of the affiliation, between April 1 and June 30, 2019. Furthermore, according to a release issued by the hospital, the participating hospitals insisted on the right to withdraw without a showing of cause.
“After a careful review by our board of trustees about the effectiveness of the affiliation to date, and of LRH’s future strategic opportunities, our board determined that the interests of the greater Littleton community would be best served by LRH'S withdrawal from the affiliation,” the release states.
Following the board’s Feb. 18 vote to withdraw, the hospital said it provided North Country Healthcare with pre-notice of its intent to give a formal withdrawal notice on April 1. On April 4, Littleton Regional Hospital said it gave formal notice to North Country Healthcare and the three other hospitals of its decision to withdraw.
The hospital said North Country Healthcare has refused to accept its decision and charged that efforts to work out an orderly withdrawal plan were met with threats of litigation.
“LRH was left with no choice but to ask the court simply to enforce our clear contractual right to withdraw,” it said.
In its response, North Country Healthcare said Littleton Regional served notice in February of its intent to withdraw from the affiliation and took legal steps to accelerate that withdrawal to pursue new opportunities. North Country Healthcare said Littleton Regional’s actions violated the agreement, which “clearly states that an accelerate of alternative withdrawal process is not allowed.”
In its release, North Country Healthcare said Littleton Regional Hospital chose not to follow departure guidelines that include a four month period for review and negotiation.
North Country Healthcare said when Littleton Regional notified the other three hospitals of its intent to leave, it recommended a meeting of the hospital and North Country Healthcare boards to try and resolve the issue. It said Littleton Regional opted not to participate and instead filed suit.
In response, North Country Healthcare said it filed a countersuit alleging the hospital failed to live up to the affiliation agreement, had negotiated in bad faith, and took unilateral actions that went against the spirit of collaboration to provide improved, efficiently-delivered healthcare to North Country residents.
North Country Healthcare said it welcomes the intervention of the Charitable Trusts Division and will continue to work towards dispute resolution. At the same time, North Country Healthcare said the actions of Littleton Regional Hospital will not deter it from its mission of providing consistent, high quality, accessible, and integrated healthcare across the communities it serves.