U.S. Bankruptcy Judge Christopher Lopez granted the sale of Stewardship Health to Nashville, Tenn.-based Rural Healthcare Group, part of private equity firm Kinderhook Industries, for $245 million in cash, according to Aug. 16 court documents.
"The deal that's on the table is the best one," Mr. Lopez said during an Aug. 16 bankruptcy hearing. "It's the highest and the best."
Mr. Lopez's decision allows the proposed transaction to progress to a review by state and federal regulators for final approval.
RGH comprises 17 clinics across the U.S. Under the sale, it will take on Stewardship, which combines Steward Health Care Network and the Steward Medical Group primary care providers with an integrated primary care network of around 5,000 employed and affiliated providers in nine states.
Stewardship is also offered to Medicaid and commercial populations, according to an Aug. 12 Steward news release.
During the hearing, a representative for Humana expressed concern over Rural Healthcare Group's purchase of Stewardship Health regarding its contracts.
"If our contracts are rejected, which they have the right to do, we need a transitional period to ensure that we can provide and find new primary physicians, especially physicians for our membership and patients," the representative said. "As it stands, we don't believe there's any transitional plan in place to help us do that, and we're happy to continue to have discussions with [the] debtors."
While Mr. Lopez acknowledged there is still some work to be done, he pointed to his availability for all involved parties should any concerns arise.
"I think sometimes polarity and greater clarity may resolve some of these issues, but if not, I want parties to know that I will make myself available. They won't have to wait very long," he said.
Steward attorney Ray Schrock told Mr. Lopez that they are "very close" to selling "hopefully all six" but "certainly at least five" of the health system's Massachusetts hospitals. While Steward has $30 million of committed funding from the state to help keep hospital operations afloat, a hearing is scheduled for the morning of Aug. 20 should the system need any type of emergency funding.
"[It is] my sincere hope, and we are doing everything possible to avoid that outcome and get to a good outcome with the hospitals over the weekend, but just in case, [I] wanted to make sure that we had that requested," Mr. Schrock said.