Massachusetts’ highest court approved UnitedHealth Group subsidiary Optum’s $236 million proposed acquisition of Atrius Health, one of the largest not-for-profit physician groups in the state.
Massachusetts Supreme Judicial Court Justice Dalila Argaez Wendtland ruled the proposed transaction was in the public interest and that it was impracticable for Atrius to continue to operate as a not-for-profit. Atrius Health had been struggling financially. The state attorney general approved the decision in late April and, with Friday’s judicial review, the companies have completed all the legal steps necessary for the deal to go forward.
The net proceeds from the sale will be transferred to the Atrius Health Equity Foundation.
As a condition of the deal, the foundation must submit quarterly reports to the state attorney general on its use of third-party vendors, appointment of independent trustees and population health initiatives over the next two years. The foundation will also tell Massachusetts if any employees transfer to its workforce from Atrius Health.
Once the transaction closes, Atrius Health will no longer be designated as a public charity under state law.
Over the next five years, Atrius must annually report patient race, ethnicity and other demographic data to the attorney general, along with the portion of revenue generated from public and private payers and whether reimbursement fell under fee-for-service or capitation rates, Wendtland said. The health system must also provide the state attorney general annual reports on the types of investments made and their impact on its value-based care and population health initiatives. Atrius must also “make best efforts” to ensure the health system and its clinicians continue to serve Medicaid and Medicare patients, according to the decision.
The Massachusetts Supreme Judicial Court will enter another order once the transaction has closed.
UnitedHealth Group and Atrius Health did not immediately respond to interview requests about when they expect the deal to be complete.
UnitedHealth Group in March 2021 announced its intention to buy the Boston not-for-profit, which provides medical services to one in 10 patients in the state and is made up of more than 700 clinicians. Atrius workers will join UnitedHealth Group’s Optum arm, the organization’s fastest-growing, healthcare services division.
The deal is part of UnitedHealth Group’s overall acquisitions of 10,000 clinicians in 2021. The healthcare parent—which also houses the nation’s largest insurer, UnitedHealthcare—is the largest employer of clinicians in the nation, with more than 60,000 healthcare professionals working under Optum.