After initially suing AtlantiCare to prevent it from leaving its system earlier this year, Geisinger Health has now agreed to the departure.
The two health systems announced Tuesday that they have struck an agreement under which Danville, Pa.-based Geisinger will no longer serve as the parent company of AtlantiCare, based in Egg Harbor Township, N.J. As part of the deal, Geisinger has withdrawn the lawsuit it filed in January.
The agreement could take six to 18 months to finalize, as it contains a number of closing conditions, the systems said. In the meantime, AtlantiCare will remain part of Geisinger. Geisinger acquired AtlantiCare in October 2015.
In a joint statement, Geisinger and AtlantiCare said they are guided by the desire to do what is best for the people and communities they serve.
"We believe this agreement best supports the long-term health and wellness of our communities and makes the best use of our non-profit resources today and into the future," the statement said. "We remain committed to working together to ensure the continued delivery of high-quality healthcare services.
The systems said the proposed agreement, if completed, is not expected to impact patients, employees, facilities and the communities the systems serve.
In the January lawsuit, Geisinger accused AtlantiCare, its chairman and its CEO of violating the terms of the 2014 agreement in which Geisinger acquired the health system. That's after AtlantiCare's chairman accused Geisinger of breaching the terms in August 2019.
Geisinger drew $7.1 billion in revenue in its fiscal 2019, generating a 1.7% operating margin.