The U.S. Justice Department is objecting to Steward Health's proposed timetable for the sale of its physicians' network to Optum, a division of UnitedHealth.

This proposal dates back to March of 2024 when Steward Health entertained an offer to purchase its physician network, Steward Medical Group, in multiple states, including Ohio and Pennsylvania, by Optum.

If the proposed sale goes through, all doctors currently employed by Steward could soon be working for Optum, but after two months, neither party has been able to reach a definite agreement.

According to a court filing from Tuesday, May 28, Steward intends to use the proposed sale as a "stalking horse" bid for a bankruptcy sale. A "stalking horse" bid is defined as "an initial bid on the assets of a bankrupt company before a public auction."

According to court records, Steward is seeking an auction of its assets on June 27 and a final sale hearing on July 2.

The Boston Globe reported Wednesday that new documents recently filed in the Steward bankruptcy case cast doubt on whether the planned sale of the physicians' group to Optum will be completed with Optum after becoming complicated due to backlash by lawmakers and the bankruptcy filing.

The Justice Department says its ongoing review of the proposed sale is in its early stages and may require extensive production of documents and data before it determines whether or not it objects to the purchase.

However, the Justice Department says this timetable makes no mention of this review process and could be construed to "undercut the United States' regulatory rights by permitting [Medical Properties Trust] to impose hasty sale procedures for [Steward] and terminate financing if the debtors fail to close a sale by a date acceptable to MPT."

The Justice Department says Steward would need to acknowledge that this sale is subject to the Clayton Act, which according to justice.gov aims to "promote fair competition and prevent unfair business practices that could harm consumers."

The Justice Department says it reserves the right to conduct a full antitrust review and if necessary, file an enforcement action concerning the proposed sale regardless of Steward's proposed timetable.

The Boston Globe also noted that the new documents filed in US Bankruptcy Court in Houston on Monday indicate dozens of parties of parties have signed non-disclosure agreements to examine Steward's financial data to determine interest in the bankrupt hospital chain and its assets.

RELATED COVERAGE: