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Geisinger, AtlantiCare sever merger

Danville, Pa.-based Geisinger and Atlantic City, N.J.-based AtlantiCare have reached an agreement to part ways, the two health systems announced March 31. 

AtlantiCare has been part of the Geisinger system since 2015, when the Danville, Pa.-based system acquired it.

The decision to separate comes after months of negotiations between the two parties after AtlantiCare voted to break away from Geisinger in September 2019. 

In response to the September vote, Geisinger sued AtlantiCare in an attempt to stop the health system from leaving. In the lawsuit, Geisinger accused AtlantiCare of violating the signed merger agreement.

The merger agreement, signed in 2014, allowed AtlantiCare to terminate the merger within 10 years, but only if Geisinger became controlled by a for-profit organization or affiliated with a religious organization. Neither of those circumstances occurred, according to the lawsuit. 

The lawsuit didn't disclose the reason the New Jersey health system wanted to regain its independence.

However, now the two parties have reached a mutual agreement to go their separate ways. 

Geisinger has also agreed to drop the lawsuit.

"Throughout this process, both Geisinger and AtlantiCare have been guided by the desire to do what is best for the people and communities we serve in Pennsylvania and New Jersey. We believe this agreement best supports the long-term health and wellness of our communities and makes the best use of our nonprofit resources today and into the future. We remain committed to working together to ensure the continued delivery of high-quality healthcare services," the two systems said in a joint statement. 

The separation of the two organizations is expected to take six to 18 months. 

More articles on healthcare industry transactions:
2 Brooklyn nonprofit hospitals merging
FTC challenge of Philadelphia hospital merger 'myopic,' AHA says
Penn Highlands Healthcare to absorb Pennsylvania hospital

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