UnitedHealth Group's Optum is seeking to fast-track its proposed purchase of Corvallis (Ore.) Clinic, citing an urgent need to "maintain the solvency" of the physician-owned organization.
"Because of the Clinic's lack of stability from a cash perspective, the Clinic simply doesn't have time to undergo continuing regulatory review without necessitating further cost-cutting measures that would almost certainly negatively impact care before the time that the Clinic would be potentially forced to close its doors," Corvallis Clinic's attorneys wrote in an emergency application filed with the Oregon Health Authority on March 7. "Now, in early 2024, as the financial condition of the Clinic has worsened, the Corvallis Clinic is also of the belief that the proposed transaction with Optum is likely the only way it can maintain solvency and continue to provide care to the community."
A spokesperson for Optum told Becker's on March 12 that the emergency application was filed so the clinic "can continue serving their patients and communities with the care they need. As outlined in numerous filings and discussions with the state since December 2023, the Corvallis Clinic has significant longstanding financial issues that have come to a head, necessitating this emergency filing."
The spokesperson noted that the clinic's financial issues existed before the cyberattack on Optum's Change Healthcare in late February, which has created significant cash flow issues among providers nationwide facing an absence of timely payments due to an inability to submit claims.
According to a March 10 report from The American Prospect, Corvallis Clinic uses Change to process medical claims, leaving the organization low on funds following the attack.
"Our claims processing goes through [Change], so all of a sudden there was no money coming in," an anonymous Corvallis Clinic employee told the news outlet. "They're praying that the sale's going to go through and that Optum will front them the money."
When Optum first applied to purchase the clinic in December, it stated that the organization's "financial forecasts project material losses over the next 12 months, despite the physician-owners' 15% reduction in compensation which was put in place more than a year ago."
Corvallis Clinic outlined that ongoing losses and financial instability would lead to providers seeking higher compensation opportunities elsewhere. It also argued that the loss of physicians in the area would decrease access to care and limit opportunities for health equity initiatives if the proposed transaction is not approved. If the deal is approved, Optum said it plans to spend more on hiring more providers and investing in new equipment and software at Corvallis Clinic.
Hundreds of people, including physicians, patients and state legislators, have urged regulators to block the proposed purchase.
Corvallis Clinic includes 11 clinics, an ASC and more than 110 providers, according to its website. It is the largest multispecialty group in Oregon's mid-Willamette Valley and offers a variety of services, including primary care, behavioral health, physical therapy, occupational medicine, radiology and laboratory. Optum has nearly 90,000 employed or affiliated physicians and another 40,000 advanced practice clinicians.