Nonprofit behavioral health providers The Village for Families & Children and Wellmore Inc. have cleared a regulatory hurdle in their planned affiliation after state officials determined the transaction does not require Certificate of Need review.
The state Office of Health Strategy ruled June 1 that a CON is not required for the transaction, which will make Hartford-based The Village the sole corporate member of Waterbury-based Wellmore while allowing the two organizations to remain separate nonprofit entities.
The affiliation is expected to take effect July 1.
In documents filed with OHS, neither organization disclosed a purchase price; the filing lists the estimated project cost at zero dollars.
Wellmore operates behavioral health and substance-use treatment programs from five locations in Waterbury and Wolcott, serving residents from more than 40 communities across western Connecticut.
It provides services under contracts with the state departments of Children and Families (DCF), Mental Health and Addiction Services (DMHAS) and Social Services (DSS), as well as with the Judicial Branch.
The Village provides behavioral health services for children and adults and maintains more than 20 contracts with state agencies, including DCF, DMHAS and DSS, as well as with the Department of Public Health, Department of Education and Office of Early Childhood.
Under the affiliation, The Village will become Wellmore’s sole member and gain governance authority over the organization. Wellmore, however, will continue operating under its existing name, licenses, locations and state contracts, according to the filing. No service reductions or changes to the populations served are planned.
In their request to OHS, the organizations said the transaction involves two nonprofit providers whose programs are already exempt from the state’s CON requirements because they operate under contracts with state agencies and provide services licensed or funded by DCF. OHS agreed with that interpretation.
The agency noted that a change in governance would ordinarily qualify as a transfer of ownership requiring CON approval, but because both organizations already qualify for statutory exemptions and the affiliation does not alter that status, the transaction does not require further review.
Acting OHS Commissioner Amy Porter said in the determination letter that the affiliation does not change the organizations’ eligibility for exemptions that apply to nonprofit providers delivering services under state contracts.
OHS cautioned, however, that if, in the future, either organization seeks to provide services outside the existing state-agency arrangements, it may need to obtain a CON.
The Village’s CEO Hector Glynn said the merger is a win-win for both organizations and their clients.
“This is about capitalizing on what we each do well, learning from each other and most importantly, using our combined resources to invest in programs that transform lives,” he said.
Once finalized, Wellmore President & CEO Gary Steck will become The Village’s Chief Impact Officer, while Glynn will remain The Village’s president & CEO. No layoffs are planned as a result of the merger.
