The finding means that control of a Georgia nonprofit may be transferred to another nonprofit that's controlled by a public hospital authority in North Carolina.
A deal between Atrium Health, based in Charlotte, North Carolina, and Navicent Health, based in Macon, Georgia, has been deemed appropriate by the Georgia Attorney General's Office.
The state regulator released a 14-page report on the proposed transaction last week, finding that it satisfied all 13 factors stipulated by Georgia law, including factors related to completing due diligence, assessing any conflicts of interest, conducting a proper valuation, and guarding charitable interests.
The finding means that control of a Georgia nonprofit may be transferred to another nonprofit that's controlled by a public hospital authority in North Carolina.
Rather than Atrium buying Navicent outright or leasing its hospitals, the proposed arrangement would be based on a member substitution transaction, according to the report. A wholly owned Atrium subsidiary identified as AHNH Georgia Inc. will become Navicent's sole member. Navicent Health Foundation, meanwhile, will continue to operate as an independent entity.
The review by the attorney general's office acknowledged operational and financial benefits as identified by independent analysts, including a commitment by Atrium to spend at least $425 million in capital projects for Navicent over the coming decade.
"Atrium Health has committed to continue to provide certain core services currently provided by the hospitals and is not permitted to terminate those services without agreement from the board of Navicent," the attorney general's report states.
Atrium announced its planned partnership with Navicent last February a day after changing its name from Carolinas HealthCare System. The deal constitutes Atrium's first step out of North and South Carolina.
Navicent President and CEO Ninfa M. Saunders, MD, FACHE, said in a statement at the time that the Atrium deal will ensure that a Macon-centered organization will still lead healthcare in central Georgia and the broader region.
"This will also give us access to Atrium Health's wide array of award-winning, proven successes and best practices in healthcare delivery that we can deploy in our service areas," Saunders said in a statement.
The Navicent-Atrium deal comes as there's been a significant amount of merger-and-acquisition activity this year around Atlanta-based systems. Piedmont Healthcare acquired Columbus Regional Healthcare System, and Emory Healthcare acquired DeKalb Medical.
Atrium had been looking also for a deal with UNC Health Care, based in Chapel Hill, North Carolina, but that prospective combination fell apart in March amid disagreement over who would lead.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.