Compass Medical, whose abrupt closure last week upended care for the practices’ 70,000 patients and left hundreds scrambling for new doctors, had recently been in negotiations with the nation’s largest physician organization for a possible acquisition, according to two former employees familiar with the talks.
Since the company’s collapse on May 31, several of Compass’s doctors have gone to join a local practice owned by that company, Optum Care, as have several executives, some of whom announced their departure even before the company filed for bankruptcy.
In a statement, the local practice, Atrius Health, acknowledged it had worked to negotiate a deal with Compass prior to its collapse but said it bore no responsibility for the practice’s sudden closure.
“From the outset of those negotiations, Atrius Health was committed to a smooth and orderly deal process that would allow Compass Medical to remain open and avoid disruption to patients, providers and employees,” Atrius said in a statement. “This unfortunate situation is the result of decisions made by Compass Medical, its significant financial challenges and its inability to secure the required financing to keep its doors open and avoid a Chapter 7 bankruptcy liquidation.”
On Monday, days after the sudden closure, Compass filed for Chapter 7, initiating the liquidation of its assets.
In an e-mailed statement, Compass board chair Dr. Bruce Weinstein, who has since been appointed chief of internal and family medicine at Atrius, declined to specify what precipitated Compass’s abrupt closure. But he denied any wrongdoing, noting instead that many staff had worked diligently over the past week, without compensation or benefits, to mitigate the effects on patients and staff.
“None of our leadership or our providers have financially benefited from any aspect of Compass’ closure, and all of them have — in fact — experienced significant negative financial impacts,” Weinstein said. “The fact that our former executive team members have, in many cases, already found employment speaks to their level of competence and dedication, and to the respect they’ve earned over the years from local healthcare providers.”
Compass’s problems started in early 2022, when it separated from Steward Health Care in the midst of a legal dispute, according to the two former employees who asked to remain anonymous because they weren’t authorized to speak about the company. Around the same time, Compass began conversations with multiple organizations for a partnership or acquisition, former employees and sources said.
But in October 2022, a Suffolk County jury ordered Compass to pay Steward more than $16 million for breach of contract, misrepresentation, and unjust enrichment, in a lawsuit Compass had initially filed against Steward. By then, many of Compass’s potential partners had walked away from talks, but discussions continued with some, including Atrius and its parent company, Optum, the former employees said. Optum Care is the country’s largest physician organization and is the provider arm of UnitedHealth Group, which also owns national insurer United HealthCare.
Around January, Compass executives began talking about filing for bankruptcy, and ultimately decided to restructure the company under Chapter 11, with the understanding that Atrius and Optum would purchase Compass at the conclusion of the process, the former employees said.
Compass had additionally negotiated with Brookline Savings Bank for several months’ worth of financing to get the physician group through the Chapter 11 filing and acquisition, former employees said.
Atrius this week confirmed that Compass had “invited Atrius Health/Optum to negotiate to acquire the business through a bankruptcy process for a fixed amount” and said that “at no point did Atrius or Optum commit to financing Compass through a bankruptcy process.”
The deal ultimately fell apart in mid-May, and the bank withdrew its financing, former employees said. Spokespeople for Brookline Savings Bank declined to comment.
In its statement, Atrius said it “did not back out of a proposed deal and did not cause nor is responsible for any bank withdrawing financing.”
But a day before news of the closure became public, Atrius began sending job offers to Compass providers, according to e-mails shared with the Globe.
On Saturday, Atrius executives sent a memo to new physicians who transferred from Compass welcoming them to the company and saying they could “only imagine how troubling the past week has been for you.” The memo noted that many former Compass leaders had joined the company to help in the transition, including Weinstein.
“We feel fortunate to have some of your Compass leaders join Atrius,” the memo said. “As we get them on-boarded, they will be able to provide you with direct support and communication through this transition period and beyond.”
In a statement, Atrius said it was working to support continuity of care for Compass Medical patients while offering employment to providers and staff.
“We stand ready to welcome all patients in the communities we serve who may be affected by the closing of Compass Medical and will quickly help those impacted physicians re-establish their practice,” the company said, referring to the doctors it was hiring. Several Compass doctors have also joined Steward Medical Group, according to Compass’s website.
A spokesperson for Steward Health Care questioned the timing of Atrius’s hiring of so many Compass doctors and executives as Compass was shutting down its large geographic footprint of practices, which includes several low-income communities, and filing for bankruptcy. Steward also noted the recent appointment of Compass’s board chair to the new position at Atrius.
“These events underscore the fundamental issue that for some time Compass executives have placed their own personal economic interests — and greed — above the safety and well-being of 100,000 underserved, disadvantaged patients,” a spokesperson said.
Weinstein disputed the characterization.
“The fact that none of [Compass’s executives] have sought employment with Steward should come as no surprise,” Weinstein said. “While Compass’s former executive team has continued to work on behalf of our patients, it is entirely unclear to me how Steward’s gratuitous and personal attacks in any way benefit our patients or our community.”
He also added that the legal dispute with Steward had not been settled. Though a jury had arrived at a verdict on some of the claims, he said, there was “no final judgment and Compass has not been ordered to make any payment by the court.” He added that the case is ongoing.
While many Compass physicians have found a soft landing with the company that once considered acquiring it, many patients are still struggling to find new doctors.
Mary Ann Prunier of Taunton said the closure has disrupted care for her, her husband, both of her elderly parents, and her 90-year-old mother-in-law.
In a panic, she ended up going to CVS MinuteClinic to get a refill on critical prescriptions that were soon going to run out. A week before the closure, her father was given a cardiac monitoring device to wear, and he is unsure where to go for follow-up care.
Though several of their physicians are moving to Atrius, the closest office is now at least a 45-minute drive away.
“It’s hitting all of us at once,” she said.
On Tuesday, the Department of Public Health and the Board of Registration in Medicine reminded physicians of their individual responsibility to ensure that their patients receive uninterrupted care.
“Massachusetts law has recognized that ‘A physician who has undertaken to render medical services violates his duty of care if he abandons his patient or fails to take steps called for by good medical practice,’ ” the board said in a memo first issued to former Compass physicians and then distributed to all licensed physicians by the Department of Public Health. “You should keep this responsibility in mind.”
A week after Compass’s closure, many patients are still looking for care. Lorri Ventura was sitting in the waiting room of Compass Medical’s Easton office waiting for a routine blood work appointment last Wednesday morning, when a receptionist told everyone to leave. The computers had all gone down, and patients were told to call the office the following day to reschedule.
“That, apparently, was when everything collapsed,” Ventura said.
The day after leaving the waiting room, Ventura got a phone call from her physician, letting her know she had filled her prescriptions for six months.
Days into a desperate search for a new doctor, she received a welcome phone call from Atrius. Some other providers from Compass had moved to the company, they told her, and they recommended she call back to make an appointment — in several months.