An Illinois state board is holding off on approving or denying Advocate Aurora Health and Atrium Health’s bid to merge and form a 66-hospital nonprofit giant.
After initially voting 3-2 to reject the health systems’ change of ownership request, the Illinois Health Facilities & Services Review Board reconsidered and decided to give the nonprofits a chance to share more information on how the combined entity would be run, according to Crain’s Chicago Business and Chicago Tribune reports from the in-person meeting.
Board members had said during Tuesday morning's initial vote that they had concerns over the operations and controlling interests of the would-be six-state system, the outlets reported.
Advocate Aurora Chief Operating Officer Bill Santulli had reportedly told the board that the organizations would put together the requested additional information for their review.
With the board not scheduled to reconvene until December, Administrator John Kniery said a postponement would give the health systems a chance to receive a decision without needing to refile, according to Crain's.
The board's request adds a new hurdle to Advocate Aurora and Atrium’s planned merger, which the organizations recently wrote in summer financial reports was expected to close before the end of the year.
Both systems told Fierce Healthcare they will work with Illinois' board and other regulators to close the deal.
"There are a number of regulatory bodies that have asked for information to review related to Atrium Health’s proposed strategic combination with Advocate Aurora Health," Atrium said in an email statement. "The board in Illinois has indicated it wants to see additional information, and we will continue to share appropriate information."
Advocate Aurora said Illinois' holdup was unexpected but still believes the organizations will hit their end-of-the-year target.
"State statute requires the Review Board to approve all Certificate of Exemption applications that staff have deemed complete," Advocate Aurora told Fierce Healthcare in an email statement. "Our application was deemed complete last month, thus, we were surprised by today’s delay and will work with the Review Board to address their questions."
If joined, the new entity would represent one of the country’s largest health systems with over $27 billion in combined revenues. It would serve roughly 5.5 million patients, operate over 1,000 care sites and employ 148,000 people.
The deal had already picked up some detractors since its May announcement.
The Service Employees International Union Healthcare Illinois labor group, for instance, submitted comments in August warning that the merger would “likely reduce the quality and increase the cost of healthcare in Chicagoland.” It also raised concerns regarding out-of-state ownership and Advocate Aurora’s recent service reductions over the past half-decade.
Additionally, a class action suit filed in May alleging anti-competitive practices in eastern Wisconsin argued that the potential merger “would further increase [Advocate Aurora’s] market power with network vendors, especially the network vendors who operate in both the existing [Advocate Aurora] and Atrium markets.”
Advocate Aurora is headquartered in Milwaukee, Wisconsin and Downers Grove, Illinois. It operates more than 500 ambulatory locations and 27 hospitals. It treats 2.6 million unique patients and employs 75,000 people, including 10,000 employed physicians.
Atrium Health, based in Charlotte, North Carolina, claims $13 billion in annual revenue from its 40 hospitals and more than 500 ambulatory locations. It employs 73,000 people and treats 2.9 million unique patients.