What’s next for the Atrium-WakeMed deal?

By Anne Blythe and Michelle Crouch 

The proposed combination of Atrium Health and WakeMed Health & Hospitals cleared a major hurdle Monday when Wake County commissioners gave it the go-ahead, but it’s not yet a done deal.

The partnership still faces review by federal regulators and the state attorney general’s office. 

In addition, the two hospitals still need to nail down the language spelling out two last-minute commitments made by Atrium after Gov. Josh Stein intervened. 

Monday’s 5-2 vote to allow the combination capped months of public hearings, public sniping over prices, behind-the-scenes negotiating and controversy. It gives Atrium Health, the largest hospital in the state, significant control over Raleigh-based WakeMed. Atrium has promised to bring $2 billion in investment and 3,300 jobs to Wake County; WakeMed has said it needs Atrium to compete more effectively against larger health care systems.  

“This vote brings us to the next chapter of the process, and important work remains ahead,” the two hospitals wrote in a joint statement released late Monday night. “As the proposed combination now moves to the regulatory review process, we look forward to fulfilling our commitments.” 

Stein, a Democrat, and State Treasurer Brad Briner, a Republican, each called for Attorney General Jeff Jackson to take a hard look at the deal.

“I’m echoing the call for Attorney General Jeff Jackson to step in and conduct a thorough independent assessment of this transaction, its effect on prices, competition and access,” Briner said in a video statement. “Hospital consolidation leads to less competition and higher prices.”

The attorney general’s role

The state’s Department of Justice is required to review the agreement “to make sure it complies with the law,” Nazneen Ahmed, a spokeswoman for the attorney general’s office, told NC Health News in an emailed statement. “We’ll begin that work when we receive official notice and all documents from the parties.”

The state statute she included with her message reads: “a charitable or religious corporation shall give written notice to the attorney general 30 days before it sells, leases, exchanges, or otherwise disposes of all, or a majority of, its property.”

The notice is to include “all the information” that the attorney general deems necessary for “a complete review of the proposed transaction.” If needed, the attorney general can impose an additional 30-day period with written notice. During that period, the review cannot be finalized.

Lisl Dunlop, an antitrust attorney who represents companies in health care transactions, said federal law gives state attorneys general the authority to investigate companies for potential antitrust violations and to bring cases on behalf of their state’s consumers who could be harmed by a transaction. 

Across the country, she said, that type of involvement is becoming more frequent. 

“I’m seeing a lot of state AG activity,” she said, citing recent hospital transactions in Idaho, Minnesota and Pennsylvania. “The states haven’t been stopping the mergers, but they have been regulating them by imposing conditions.”

The North Carolina attorney general’s office has done it before. When Stein was attorney general from 2017 to 2025, he negotiated several commitments as part of for-profit HCA’s 2019 purchase of Mission Health, including requiring the appointment of an independent monitor to oversee compliance.

Stein said at the time his office’s negotiations led to a better deal for western North Carolina communities. Over the next few years, though, the attorney general’s office received so many complaints about HCA not living up to those commitments that Stein’s office sued HCA and accused the Tennessee-based system of violating the asset agreement. That case is still pending. 

The HCA-Mission transaction was different from the WakeMed-Atrium deal, however, because it involved the outright sale of a nonprofit hospital system’s assets to a for-profit company. 

In 2022, when Atrium “combined” with the much larger Advocate Aurora Health, Stein was still the state attorney general. At the time, he noted his inability to prevent the combination with Advocate Aurora, an out-of-state entity.

“Currently, the law limits my office’s authority to protect patients’ health care access, quality, and costs,” Stein said at the time. “We can do better, so I will be working closely with leaders in the legislature to address this health care loophole. I will continue to fight on behalf of patients.”

As the conversation about the WakeMed and Atrium deal was gaining steam earlier this year, state Sen. Jim Burgin (R-Angier) introduced a bill, SB 978, that would have significantly broadened the power of state officials over hospital transactions. The legislation would have given the state auditor, attorney general and state treasurer authority to review major hospital transactions and to ask a court to block any that increased costs, limited health care access or harmed quality of care — not just those that violate antitrust or consumer protection laws.

Lawmakers at the General Assembly removed those provisions from the bill in June.

Federal regulators will take a stab

The Federal Trade Commission will also need to review the transaction. It will mainly focus on whether the deal will lessen competition, which, in hospital merger cases, often means whether it will raise prices, said Dunlop and Kevin Hahm, an antitrust attorney who worked for 15 years in the FTC division that oversees hospital merger reviews. 

The combined system will have a footprint in three of North Carolina’s largest cities, potentially giving it leverage to negotiate harder with insurance companies over reimbursement. 

Recently, the FTC announced it would move to stop “bad hospital deals” after it raised competitive concerns about the potential buyer of an Ohio hospital and steered that hospital to another buyer. 

“If you have not searched broadly for a buyer, we will work expeditiously with firms to investigate whether there is a better buyer and, if the Commission deems it necessary, go to court to block a bad deal,” wrote FTC Bureau of Competition Director Daniel Guarnera in a news release.

One of the critiques of the WakeMed-Atrium proposal is that WakeMed worked only with Atrium over the course of several years and failed to take other bids. 

After the agreement became public in May, UNC Health made an offer to merge with WakeMed, offering $5 billion in local investment, according to reporting by The Assembly. WakeMed’s board quickly rejected it, citing concerns it would reduce competition in Wake County and attract antitrust scrutiny.

Hospitals in the same market raise obvious red flags because the two hospitals compete for patients in the same market, making it easy for them to raise prices.  

But that doesn’t mean Atrium, based in Charlotte, will necessarily get a pass over combining with Raleigh-based WakeMed. Although Atrium and WakeMed operate in different geographic markets, a growing body of research indicates so-called “cross-market mergers” can lead to higher prices because of their increased negotiating power, said Zarek Brot-Gronberg, a University of Chicago health economist who has studied the effects of cross-market mergers.

“These two hospitals, even though they don’t directly compete, now have this additional bargaining power,” he said. If an insurer doesn’t agree to the combined system’s terms, the threat becomes: “If you don’t come to agreement for both of us, we’ll both be out.” 

Antitrust experts said the FTC has taken an interest in cross-market transactions and has begun investigating them —  including Atrium’s 2022 combination with Advocate Aurora Health. 

However, the agency has never taken an enforcement action against one, noted Hahm.  

Hahm pointed to the 2022 merger of Michigan health systems Spectrum Health and Beaumont Health, which created Michigan’s largest health care system, as a key example. The deal, which combined large systems on different sides of the state, drew significant FTC scrutiny, but the agency ultimately chose not to challenge it.

“To me, that was the poster child if the FTC was going to try to go after a cross-market hospital merger,” he said. “So I would be surprised to see the FTC take action to block this transaction.”

Hahm said the agency typically has a 30-day review process after receiving notice of a transaction, and most deals have been able to proceed after that. If the FTC decides to take a deeper look, it can issue a request for additional documents and information that can extend the agency’s review for months, he said.

The WakeMed-Atrium deal is not an outright sale. Tiffany Campbell, a Wake County assistant attorney, gave the commissioners a primer Monday night on the difference in the terms: 

“This is a situation where WakeMed remains WakeMed as far as the legal entity,” Campbell said. “It is the same nonprofit corporation now, and it will be going forward. It retains its existing articles of incorporation. It retains its existing board of directors, but it would have a sole controlling member that would be Atrium Health.”

Dunlop said the fact that the deal is structured as “a combination” rather than a merger or acquisition will likely make little difference to antitrust regulators.

“Ultimately, you’ve got a member substitution,” she said “Even though there’s going to be a separate independent board, there’s significant control over the operations. … Basically, two independent centers of decision-making are becoming one.”

For example, as the sole member, Atrium will have the power to remove WakeMed’s CEO for cause on its own, without agreement from the WakeMed board. 

County attorney to review final language

The Wake County commissioners vote did not give the deal an unconditional green light. 

The commissioners’ motion authorizes Wake County Commission Chair Don Mial to sign the documents only after the county attorney reviews the final language in the agreement between WakeMed and Atrium and ensures that it reflects what the commissioners thought they were approving.

That includes two last-minute promises made by Atrium under pressure from Stein: that $2 billion to be invested in Wake County will come from Atrium’s coffers, not WakeMed’s, and a five-year period during which price increases can be no more than 1.5 times the annual increase in Medicare costs.

County Attorney Roger Askew said Monday that the county was not involved in the negotiations between Stein and Atrium, and he did not think the language codifying those pledges had been drafted yet. 

“I will make sure that it’s solid,” he told the commissioners. “Our charge as lawyers is to make sure that that’s in there to do what it says it’s going to do.”

On Tuesday, Wake County spokeswoman Kate Maroney said in a written response to questions that Askew would be involved in drafting that language. She said the full board of commissioners “will review the language prior to the board chair signing it, but they will not vote again on the language.” 

Although there is no specific timeline, she said the plan is to have the language finalized within 60 days.

Although the motion voted on by the board says its approval is “subject to any other terms and conditions required by the county attorney,” she said that does not mean the county can request additional conditions.

“The material terms of the agreement are finalized,” she wrote. 

In his video statement on Tuesday, Briner called the current deal a “bad decision,” adding that he hopes federal regulators will step in and “consider how cross-market mergers like this one harm competition.

“The people of Wake County and the taxpayers of North Carolina deserve better than what has happened here so far,” he added. “But it’s not too late to back away.”

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