Steward Health Care has allegedly struck a deal to sell its nationwide physician network, Stewardship Health, to UnitedHealth’s Optum Care in a bid to reduce its overhead as it deals with escalating debt and financial troubles.

Collaborative Care Holdings, a subsidiary of Optum, filed a notice on August 26 with the Health Policy Commission for the purchase of Stewardship Health Medical Group, which employs primary care physicians and other clinicians across nine states.

While financial details were not included in the documents filed, the sale is likely to be scrutinized by antitrust regulators due to the size of Optum’s doctor network, which is the largest employer of physicians in the country, according to the Boston Globe.

The company battled it out previously with the Justice Department in 2022 over its $13 billion acquisition of Change Healthcare. And just this past month, the DOJ announced it would be opening a new investigation into the relationship between UnitedHealth’s insurance unit and its doctor networks for potentially anticompetitive practices, reported the Wall Street Journal.

“As described in the notice, this is a significant proposed change involving two large medical providers, both in Massachusetts and nationally, with important implications for the delivery and cost of healthcare across Massachusetts. Details of the proposal will be reviewed by the HPC to examine the potential impact on health care costs, quality, access, and equity,” said David Seltz, executive director of the Health Policy Commission, in a statement.

Steward Health runs 33 hospitals across the U.S., with eight of them in Massachusetts. Optum’s network includes 90,000 doctors, a major pharmacy benefits manager, surgery centers, and a health data business.

The financial challenges it faces are primarily debt from overdue bills to Medical Properties Trust, a commercial landlord that began buying hospital buildings from Steward Health CEO Ralph de la Torre in 2016. While the deal provided more capital to expand further nationwide, hospitals were left with large rental payments. Proceeds from the sale of its physician network are expected to pay off these debts.

Additionally, the healthcare system was backed for a long time by a private equity investor before de la Torre bought out its share. Over the last year, scrutiny of private equity-owned hospital operations has ramped up, with both the White House and Senate Budget Committee conducting investigations into the effects these firms have on hospital finances and care quality.

“Steward executives have no credibility, and I am concerned that this sale will not benefit patients or healthcare workers or guarantee the survival of these facilities. It would be a terrible mistake for Steward to be allowed to walk away while looting Massachusetts hospitals one more time,” said U.S. Senator Elizabeth Warren (D-MA), who has been leading oversight of Steward, in a statement.

While Steward has obtained new loans from MPT, its financial woes have led to lawsuits from suppliers and repossession of leased medical devices by creditors, which in one case led to a woman’s death after childbirth, reported The Globe.

It is unclear if the sale will affect the value of its hospitals, which Steward is also looking to sell, but the network has attracted interest from other hospital operators.

The HPC will have 30 days to assess the required information to determine the impacts of the transaction, and can conduct a more extensive review if it chooses.

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