Community Health Systems (CHS) is selling various outpatient lab services to Labcorp for $195 million, the for-profit hospital operator announced Tuesday afternoon.
The definitive agreement affects assets and leases in 13 states, “including certain patient service centers and in-office phlebotomy locations” that operate as extensions of CHS health systems.
While those systems will continue to run their inpatient and emergency department labs and continue providing services for hospital-based care, the agreement will see CHS’ patients turning to Labcorp for their ambulatory lab and testing services—a similar arrangement to what the lab services company has in place with other providers from which it recently acquired lab assets.
The companies said the arrangement will better serve patients and providers due to “Labcorp’s comprehensive testing and laboratory services, including its specialty testing menu, robust data analytics and digital tools.”
"We are excited about this transaction with Labcorp, which allows us to focus on our core services and improve the overall patient experience, aligning with our unwavering commitment to providing high-quality, accessible healthcare to our communities," Kevin Stockton, executive vice president of operations and development for CHS, said in the announcement. “Labcorp’s scale and investment in technology supports its ability to efficiently deliver outreach laboratory services to patients and healthcare consumers.”
The deal is subject to customary closing conditions and regulatory approvals and is expected to close in the fourth quarter. The companies said they are targeting a transition with no interruptions in services “while providing direct access to the additional capabilities of Labcorp.”
Labcorp has been active in the M&A space. In between a slew of deals with other diagnostics or biopharmaceutical companies, it announced plans to acquire ambulatory lab assets from, and become a referral laboratory for, North Mississippi Health Services in April. It closed another purchase from Ballad Health with similar goals in December. Additionally, the company outlined strategic agreements with Inspira Health in January as well as Naples Comprehensive Health last July to manage daily operations at the systems' hospital laboratories and serve as the primary lab for their physician networks.