The state of Oregon will take a closer look at the deal, which is likely to delay the timeline for it to be completed if it receives approval.
The proposed joint venture between Providence and home health provider Compassus is now under scrutiny in Oregon.
The Oregon Health Authority notified attorneys representing Compassus in a letter that the transaction requires review by the Health Care Market Oversight (HCMO) program, potentially putting the deal in jeopardy and likely delaying its completion if it passes.
Under the HCMO program, state regulators can approve or deny mergers and acquisitions if they are considered anti-competitive or detrimental to Oregon’s health outcomes.
The Oregon Nurses Association called on the Oregon Health Authority to review the transaction in a letter earlier this month. Thomas Doyle, general counsel for the Oregon Nurses Association, highlighted that the joint venture could reduce essential services, such as pediatric home health.
“There is a compelling case that the proposed transaction requires HCMO approval and that Providence is seeking to sidestep that approval process or to create a sense of urgency by filing at the last minute for approval,” Doyle wrote.
As part of the proposed deal, which was announced in October, the joint venture would be called Providence at Home with Compassus and provide home health, hospice, community-based palliative care, and private duty caregiving. Compassus would mange operations for 24 home health locations in Alaska, California, Oregon, and Washington, and 17 hospice and palliative care locations in Alaska, California, Oregon, Texas, and Washington.
Providence and Compassus were aiming to close the transaction by the end of the year, according to licensing records obtained by the Oregon Nurses Association and published on the HCMO website. The HCMO review, however, could take anywhere from 30 to 180 days.
Providence spokesman Gary Walker told Oregon Public Broadcasting that the health system had filed the necessary paperwork.
“We fully intend to work closely with OHA and comply with all requirements in the review process,” Walker said.
A spokesperson from Compassus said the organization had reached out to the Oregon Health Authority in November to seek guidance on its review process for the deal.
"From the outset, we understood regulatory reviews could add time to our anticipated transition timeline. We are prepared and committed to ensuring any questions or concerns are addressed. Ensuring the well-being of patients and their families, as well as the smooth transition of Providence caregivers to our team, are our top priorities," the spokesperson stated.
Editor's note: This story has been updated on Dec. 20 to include comment from Compassus.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
The Oregon Health Authority is stepping in to review the home health joint venture by Providence and Compassus under the state’s Health Care Market Oversight program.
Opponents of the deal have argued that it will harm competition and patient care, and that Providence is attempting to bypass a review.