Massachusetts AG agrees to $236 million Optum and Atrius Health merger

Photo: Courtesy of UnitedHealth Group

Optum has received approval from the Massachusetts Attorney General's Office to go ahead with its planned purchase of Atrius Health.

The AG's office has determined that, pending judicial review by the Massachusetts Supreme Court, Atrius Health has met its requirements under Massachusetts charities law to sell its business to Optum Health and transfer its charitable assets to the Atrius Health Equity Foundation.

Atrius and Optum agreed to increase the purchase price for Atrius' charitable assets from $73 million to $236 million, which means additional money for the Atrius Health Equity Foundation, according to the AG's office.

"Our office carefully reviewed this proposed transaction. While it will mean a loss in the charitable sector of an important healthcare provider, it will enable Atrius Health to continue to serve hundreds of thousands of patients, will preserve the value of the charitable assets and ensure that the Atrius Health Equity Foundation will use sale proceeds to promote health equity," a spokesperson for the AG's office said by statement.

WHY THIS MATTERS

Atrius Health was going under financially. The acquisition by Optum will let the charitable healthcare organization survive.

"After careful consideration, taking into account the advice of its senior management team and qualified external advisors, Atrius' Board of Trustees has concluded that Atrius can no longer remain financially viable as a public charity," the Atrius board has said. "Accordingly, the board solicited proposals from a range of healthcare organizations, the majority of which were Massachusetts public charities. Based on extensive discussions concerning the proposals it received, the Board concluded that none of the public charities' proposals were feasible options for Atrius."

The board concluded that the best and only viable option for long-term survival was an acquisition of Atrius by Collaborative Care Holdings, doing business as Optum Care.

Attorney General Maura Healey said on April 14 that the transaction was consistent with applicable charities law and assented to the relief requested by Atrius.

THE LARGER TREND

The two organizations announced an acquisition agreement in March 2021. 

In June 2021, the Massachusetts Health Policy Commission released a statement on its preliminary review of the transaction, saying "the proposed Atrius-Optum transaction represents a significant change to the Massachusetts healthcare market."

Atrius is a large, independent physician-led healthcare organization that provides care to more than 690,000 adult and pediatric patients. It employs 645 physicians and primary care providers, along with 421 additional clinicians.

Optum Care has an estimated 53,000 doctors and 1,450 neighborhood clinics across the country, with a focus on primary care.

The AG's office reviewed this transaction under its charities oversight authority. The assessment included:

• whether the organization's board reasonably determined that continued operation in its current form was impossible or impracticable.
• whether the board exercised due care and avoided conflicts of interest in making that determination.
• whether the charitable organization will receive fair market value for its assets.
• whether the proposed use of proceeds is consistent with charities law.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org