Oregon state regulators will allow UnitedHealth Group's Optum to bypass a state review of its planned purchase of Corvallis Clinic, citing an immediate need to maintain the provider's financial solvency.
"Absent closure of the transaction as expeditiously as possible, the Corvallis Clinic is expected to be insolvent in the immediate term," the Oregon Health Authority said March 13. "The information provided to date reflects that the proposed transaction is necessary to protect the interest of consumers and preserve TCC's solvency."
On March 7, Optum filed an emergency application with the state, seeking to fast-track its proposed purchase of the physician-owned organization.
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. Optum said it plans to spend more on hiring more providers and investing in new equipment and software at Corvallis Clinic once the deal closes.
Hundreds of people, including physicians, patients and state legislators, have urged regulators to block the purchase.
"Optum is committed to The Corvallis Clinic's success by supporting their clinicians, staff and the patients and communities they serve with new resources and tools that will help provide long-term sustainability," an Optum spokesperson told Becker's on March 15. "The Corvallis Clinic will continue to deliver high-quality care to patients, supported by the additional capabilities of Optum, allowing The Corvallis Clinic to deepen its ability to care for the health and wellbeing of patients and communities through team- and value-based care."
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.