Optum Acquires Reliant Medical For $28M

April 03--WORCESTER -- UnitedHealth Group's Optum business has completed its $28 million acquisition of Reliant Medical Group, nearly a year after the deal was first announced.

Under the terms, Reliant will remain a locally operated medical group practice and continue to use the names Reliant Medical Group and Southboro Medical Group. Reliant and Optum said in a news release that Reliant's workforce will not change. Reliant also will continue to accept most medical insurance plans.

A spokesman said Reliant would have no comment on the deal.

The transaction brings Reliant into a vastly larger organization. Reliant employs about 2,600 people in Central Massachusetts and the MetroWest area, including more than 500 doctors and other medical providers. Reliant posted about $678 million in revenue during 2016, according to the most recent online filings with the state.

UnitedHealth Group, based in Minnesota, is a publicly traded health insurer and medical provider that reported $201 billion in revenue last year. Its Optum business employs more than 133,000 people worldwide.

State documents show Reliant told regulators it pursued the deal because its profit margins were shrinking just as it faced several challenges -- an aging physician workforce, rents poised to jump 200 percent at 13 of its 27 sites, and a need to restructure the way providers care for patients.

Reliant chose Optum after seeking proposals from an array of medical groups, according to a filing from the office of state Attorney General Maura Healey. Reliant considered 10 proposals and winnowed the field to Optum, Harvard Pilgrim and UMass Memorial Health Care of Worcester, according to the filing. Harvard Pilgrim and UMass Memorial eventually dropped out.

The deal then required months of review from state health and legal regulators, and it forced Reliant, a nonprofit organization, to relinquish its tax-exempt status. This paragraph has been corrected from an earlier version.

Ms. Healey's office, which oversees charitable nonprofits, agreed to the conversion. In a March filing in the Supreme Judicial Court for Suffolk County, Ms. Healey's office wrote that "the Reliant Board acted with due care and reasonably concluded that it was impossible or impracticable for Reliant to continue as an independent charitable medical group."

The attorney general's office also stated that in addition to paying about $28 million for Reliant, Optum has committed to more than $186 million for facilities and care restructuring, plus more than $35 million to recruit and retain doctors.

The state's Public Health Council approved the transaction March 6.

Under the court-approved transaction, proceeds from the sale of Reliant must go to the Reliant Medical Group Foundation, an independent nonprofit organization, to improve the health of people in Central Massachusetts and the Metro West area.

Reliant was founded in 1929 as the Fallon Clinic.

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