Washington, D.C.-based George Washington University and King of Prussia, Pa.-based Universal Health Services will “operationally” close their deal to transfer Medical Faculty Associates’ clinical operations July 31, but the District of Columbia’s Office of the Attorney General will maintain the ability to modify or reject it, according to a July 28 news release from Attorney General Brian Schwalb.
Under an agreement filed with the District of Columbia Superior Court, UHS, GW and Medical Faculty Associates agreed to keep sharing documents with OAG through at least Sept. 30, so the office can determine whether the transfer preserves MFA’s nonprofit mission. UHS also agreed to pay the district $610,000 for delays in the review process.
The district’s Healthcare Entity Conversion Act bars a for-profit company from acquiring control of a District nonprofit healthcare entity without OAG’s approval. The District of Columbia Council adopted the law in the 1990s after UHS acquired the formerly nonprofit GW Hospital — the same health system now negotiating for MFA’s clinical assets.
“GW Medical Faculty Associates is a nonprofit corporation that, with the benefit of charitable assets and taxpayer support, cares for thousands of patients every day,” Schwalb said in the release. “As district law requires, my office will continue reviewing this proposed transfer of control to ensure the continuity of the MFA’s vital nonprofit mission — uninterrupted, high-quality, affordable healthcare for D.C. residents.”
MFA, the largest medical group practice in the district, employs more than 700 providers who see patients daily at dozens of locations, including GW Hospital and Cedar Hill Regional Medical Center. GW and UHS agreed in May to shift most of MFA’s clinical operations to Capital Medical Group, a UHS-controlled nonprofit, after years of mounting losses at the practice. CMG is set to begin providing clinical services to MFA patients Aug. 1, and about 85% of MFA’s roughly 1,270 employees have accepted contracts with the group, according to previous reports by the GW Hatchet.
OAG opened its HECA-mandated investigation into the transfer in April and filed a civil complaint against GW, MFA, CMG and UHS this week, alleging the parties delayed providing documents “critical” to its review. The office and the parties filed a consent order the same day, pausing that complaint to allow the deal to close on schedule while OAG’s review continues.
A UHS spokesperson told the Hatchet the company maintains OAG does not have jurisdiction over the transfer and that the agreement is not an admission the deal violates legal requirements.
“UHS has agreed in connection with this framework to make a payment under the DC law that addresses amounts due when deals that may require approval close before the OAG has completed its review,” the spokesperson said. “UHS denies that any of the parties to the transaction have caused any delays in the OAG’s review of this matter.”
A GW official told the publication that the university disagrees that OAG has authority over the transfer under HECA but agreed to cooperate with the review regardless, adding that the university is prepared to walk OAG’s office and its experts through its reasoning for the deal.
“We hope and expect that the OAG will understand that we’ve looked at this issue from many directions and the three perspectives of UHS, MFA and GW,” the official said. “We jointly came to this transaction as the best way forward, and we’re willing to walk the OAG and its experts through our thought process to help them reach the same conclusion.”
MFA has posted losses for six consecutive fiscal years, including more than $100 million in fiscal year 2025, according to financial documents. MFA CEO Bill Elliott has said the group will begin winding down operations within 14 days of Sept. 6, regardless of whether OAG approves the transfer, with remaining physicians and staff ultimately terminated, per a July 8 notice to Virginia’s Department of Workforce Development and Advancement.
If OAG rejects the transfer, the GW official said the parties would try to address the office’s concerns or ask the court to arbitrate, adding that a rejection could otherwise lead to a more disruptive dissolution of MFA. OAG can approve the transaction, reject it or approve it with conditions once its review concludes.
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