Deal between Steward Health Care and Optum is off

The planned sale of Steward Health Care’s physician network to for-profit insurance company Optum has been called off, according to state officials. This development adds to the uncertainties surrounding Steward Health Care, particularly regarding the future of its hospitals and healthcare providers in Massachusetts.

Optum communicated to the Health Policy Commission that they are no longer actively pursuing an agreement with Steward for the acquisition of Stewardship Health to Optum Care. However, the companies have not yet formally withdrawn their material change notice filings with the HPC.

The potential sale was initially announced in March, but it became apparent that the necessary information for the HPC review was not provided, thus delaying the process. A number of state and federal lawmakers voiced concerns about the potential sale, with House Speaker Ronald Mariano expressing worries about its impact on the Massachusetts healthcare market and potential disruptions during a period of instability.

In a statement, Steward acknowledged the challenges faced during the DOJ regulatory review process, and stated that they and United Optum have decided not to proceed with the sale. They emphasized that Stewardship Health remains a valuable asset, and there are other parties interested in acquiring the business. Negotiations are currently ongoing.

The sale of Stewardship Health is crucial to Steward’s bankruptcy restructuring process, which is still underway. Bids for Massachusetts hospitals are due next month. An investment banker working on Steward’s behalf had previously stated that the sale of Stewardship was aimed at deleveraging the company and securing liquidity for its operations.

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