Talks between the organizations have been ongoing since late last year. A definitive deal could be signed by the end of the year.
Under the terms of the non-binding LOI, Elizabeth-based Trinitas will continue to act as a full-service provider of acute health care services for the eastern Union County community and beyond.
The release also said:
- RWJBH will make significant investments in Trinitas and will expand the network of outpatient services currently provided by Trinitas, resulting in an even higher level of care for the community;
- RWJBH will become the corporate parent of Trinitas. However, Trinitas will remain a Catholic institution and will abide by the Catholic Ethical and Religious Directives;
- The Sisters of Charity of Saint Elizabeth will continue to serve as the Catholic sponsor of Trinitas, and the Elizabethtown Healthcare Foundation will continue to address the needs of nonprofit organizations in Union County, including RWJBH/Trinitas;
- The Trinitas board will continue to oversee day-to-day operations of Trinitas.
The non-binding LOI sets forth a basic structure for the proposed transaction and puts the institutions on a path toward reaching a definitive agreement, expected before the end of the year.
According to a release from both organizations, the LOI is the first step in the process of evaluating and designing a new relationship that will enhance health care services for residents in northern and central New Jersey. Both parties will now engage in a due diligence process to define the specifics of the relationship.
Approvals will be necessary from state and federal officials, the Catholic Church and others before the transaction is considered complete.
Trinitas CEO Gary Horan said he is excited about the deal.
“I see our eventual move into the RWJBarnabas Health system as an extremely positive and exciting development for our institution — one that will give us the resources and opportunities to greatly enhance the already high level of care we provide to our community,” he said in the release.
It is unclear what type of role Horan will have in a new organization.
RWJBH CEO Barry Ostrowsky said adding Trinitas to the health system’s network will be a positive.
“The rapidly changing health care landscape presents new challenges and opportunities,” he said. “Trinitas is a vital resource to the eastern Union County community, and, through this agreement, we would greatly expand our reach into new communities with our mission of improving the health and well-being of its residents.
“We are excited about the many possibilities for collaboration signaled by this letter of intent.”
RWJBarnabas Health is one of the two major hospital systems in the state, along with Hackensack Meridian Health. The system includes 11 acute care hospitals, three acute care children’s hospitals, and a renowned pediatric rehabilitation hospital, among many other facilities. RWJBH also has a partnership with Rutgers University, creating New Jersey’s largest academic health care system.
Trinitas Regional Medical Center is a 554-bed, Catholic, acute care teaching hospital. Trinitas provides over 400,000 patient contacts per year and renders care throughout the state. Trinitas is the result of a merger in the year 2000 between Elizabeth General Medical Center and St. Elizabeth Hospital.
Trinitas currently has a number of alliances with other health organizations, including RWJBH’s Newark Beth Israel hospital for neonatal intensive care and RWJBH for maternal fetal medicine.
Trinitas is one of the last remaining independent hospitals in the state. It is unclear if the acquisition would help the hospital in its attempt to have its emergency department be identified as a Level II trauma center.
Its most recent bid to do so was recently rejected by the state in May.
Horan, while taking about a potential partnership with RWJBarnabas Health earlier in the year, said another big issue is reimbursement from insurers.
In particular, he said, independent hospitals have found it hard to negotiate for greater reimbursement with insurers. Trinitas currently relies about 35% on Medicaid, and about 12% on commercial payors.
“There is no question about that,” Horan told ROI-NJ in March. “We need to be able to have negotiating influence with insurers and being independent it makes it more difficult for that.”