Minnesota AG orders facilitator for $1B Minnesota deal

Photo: John Rensten/Getty Images

Minnesota Attorney General Keith Ellison is getting involved in negotiations over a $1 billion academic medicine deal between the University of Minnesota, Fairview Health Services and Essentia Health, with the entities agreeing to renewed discussions with a strategic facilitator to chart a path forward.

In January, the organizations proposed the formation of a new nonprofit healthcare organization to support Minnesota patients through “expanded and enhanced care.” The integrated care model would alter the state’s clinical ecosystem by bringing together Essentia, a nonprofit rural health system, and the University of Minnesota.

The University of Minnesota Medical Center is the flagship location for M Health Fairview.

The problem is that a letter of intent, signed in February 2024, detailed plans for the University of Minnesota to purchase four of Fairview Health Services’ academic health facilities, which make up the M Health Fairview University of Minnesota Medical Center. The University of Minnesota and Essentia had signaled that they would like to include Fairview in their arrangement, but according to the Minnesota Star Tribune, Fairview has signaled its opposition to the new entity as proposed, instead signaling a preference for a strategic partnership that would allow the organization to stay independent.

Earlier this month, the University of Minnesota made an offer to acquire Fairview’s 50% interest in the Clinics and Surgery Center Joint Venture (CSC JV), but the university said Fairvew rejected the offer and did not offer a counterproposal. 

Enter Ellison, who promised a “new chapter of negotiations.”

WHAT’S THE IMPACT

The Minnesota AG said his office took a more active role in the negotiations due to time pressure and the “importance of the public interest.”

“The parties have tried to find a resolution in the past, and I commend their efforts; these are complicated matters, however,” said Ellison. “Importantly, the parties recognize the importance of these negotiations to the public interest and they welcome the chance for a fresh start.”

The Attorney General’s Office will select the strategic facilitator with the parties’ input, he said. The parties, not the state, will be financially responsible for the strategic facilitator.

That facilitator will be charged with facilitating the parties’ discussions and establishing communication guidelines, milestones and deadlines. According to the AG’s office, they’ll ensure the discussions acknowledge the parties’ mutual goals of promoting the public interest, including the stability and sustainability of patient care, employees, academic research and education, along with the medical workforce and the overall quality of healthcare in the state.

THE LARGER TREND

The Minnesota Attorney General reviews healthcare transactions under Minn. Stat. § 145D.01, which authorizes the AG to consider whether a healthcare transaction is in the public interest, and to seek court intervention if necessary.

The AG also has authority over these matters as the primary regulator of Minnesota charities and to enforce the federal and state antitrust laws on behalf of the state of Minnesota and its residents.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.