Regulatory hurdles have cast doubt on whether the proposed merger between Maimonides Medical Center and NYC Health+Hospitals will be completed by its scheduled April 1 deadline.
The New York State Attorney General’s office has declined to grant administrative approval for the transaction, instead directing that the matter be reviewed by the Brooklyn Supreme Court. Because the deal cannot move forward without a court ruling, the process could be delayed for months.
The merger was first announced late last year by then-mayor Eric Adams, with city officials presenting it as a critical step to stabilize Maimonides, which has faced ongoing financial strain, by incorporating it into the municipal hospital system.
As a nonprofit institution, Maimonides requires approval from both the Attorney General’s Charities Bureau and the state Department of Health before any sale can proceed.
At a City Council hearing earlier this month, NYC Health+Hospitals CEO Dr. Mitchell Katz said the agreement was still on track for completion by April 1, despite incomplete paperwork and a legal challenge filed by members of Maimonides’ Board of Trustees seeking to block the deal.
However, roughly two weeks before that anticipated closing date, the Attorney General’s office determined that judicial review — rather than administrative approval — was necessary.
“In this matter, since there is a pending lawsuit about the transaction and significant community engagement, we concluded and advised that court review would be most appropriate,” said a spokesperson for the AG’s office.
According to the office, Maimonides must now file a petition with the Brooklyn Supreme Court. A judge will then hold a hearing and decide “whether the consideration and terms of the transaction are fair and reasonable, and that the purposes of the corporation will be promoted by the transaction.”
It remains unclear how long the court process will take or how Maimonides and NYC Health+Hospitals will proceed while awaiting a decision.
As part of the planned transition, Maimonides CEO Ken Gibbs had been expected to step down upon completion of the merger, with NYC Health+Hospitals executive Svetlana Lipyanskaya set to assume leadership.
Opponents of the merger say the Attorney General’s move validates their concerns. “The Attorney General’s office has now confirmed what we have been saying for months: this transaction cannot simply be rubber-stamped and must instead be reviewed by the courts,” said lawyer Martin Bienstock, who is representing plaintiffs in two separate cases against the merger. “The transfer of a multi-billion-dollar hospital to the City of New York demands full judicial scrutiny.”
Representatives for Maimonides and NYC Health+Hospitals did not immediately respond to requests for comment regarding the development or the merger’s outlook.
Supporters of the deal argue that the merger would provide much-needed financial stability for Maimonides, a private safety-net hospital that treated nearly 100,000 patients in 2024, including approximately 34,000 inpatient cases. About 80% of its patients are covered by Medicaid or Medicare.
The hospital has faced persistent financial challenges, reporting a $15 million loss through the first three quarters of 2025 while generating just $1.5 million in revenue. Katz told council members that Maimonides had been seeking a merger partner for years before turning to NYC Health+Hospitals.
By joining the city’s public system, Maimonides would benefit from higher Medicaid reimbursement rates, expected to bring in roughly $9 million per month, according to Katz. The agreement also includes a $2.2 billion state grant to support the transition and fund infrastructure improvements.
“By joining our system, Maimonides will be able to offer New Yorkers expanded access to high-quality care, seamless digital access to health records through MyChart, and ongoing financial stability,” Katz said at the hearing.
Still, the proposal has generated concern within the local community. Maimonides serves a significant Orthodox Jewish population, and critics fear the merger could compromise the culturally sensitive care the hospital provides. Hatzalah organizations in Borough Park, Crown Heights, Flatbush, and Mill Basin have voiced opposition, and Katz acknowledged that public opinion has been divided.
One lawsuit, filed last fall by seven members of Maimonides’ Board of Trustees and later amended, argues that the merger was rushed and could negatively affect patient care while undermining services tailored to the Orthodox Jewish community. The suit also contends that seeking approval from the Attorney General rather than the Brooklyn Supreme Court was unlawful.
A separate lawsuit filed on March 9 by a group of Brooklyn residents targets Maimonides, NYC Health+Hospitals, and the state health commissioner, aiming to halt the transaction.
That complaint alleges that Maimonides and the Department of Health attempted to bypass legal requirements governing nonprofit hospital sales and asks the court to block the merger until the case is resolved. Both legal challenges remain active.
