Aurora Diagnostics Acquires Two Pathology Group Practices

Each seller is an independent pathology group that decided to merge into a large lab company

TWO MORE PATHOLOGY GROUPS gave up their independence in recent weeks. Both groups were acquired byAurora Diagnostics of Palm Beach Gardens, Florida.

Early in June, Aurora announced the acquisition of Mid-Atlantic Pathology Services, Inc. (MAPS), of Sterling, Virginia. MAPS has four pathologists and serves physicians in Northern Virginia, Maryland, and Washington D.C. This group describes itself as “a full service dermatopathology laboratory.”

Last Thursday, Aurora disclosed an agreement to purchase Hallmark Pathology, P.C., located in Medford, Massachusetts. The group services two community hospitals in Melrose and Reading that are owned by Hallmark Health System. Five pathologists are associated with Hallmark Pathology, which serves Lawrence Memorial Hospital, a 134-bed acute care hospital in Medford, and Melrose-Wakefield Hospital, a 234-bed nonprofit hospital in nearby Melrose, Massachusetts.

Terms Not Announced

No terms for either transaction were disclosed. A closing date for the acquisition of Hallmark Pathology was not provided.

The Hallmark deal complements Aurora’s other labs in Massachusetts and New Hampshire. Last fall, Partners HealthCare of Boston agreed to affiliate with Hallmark, a deal that would allow Partners to become the sole corporate owner of Hallmark and integrate the two facilities into its system, according to Becker’s Hospital Review.

Aurora Diagnostics’ announcement of the two acquisitions caught some pathologists by surprise. In recent years, the company posted net losses of $160.8 million in 2012 and $73 million in 2013. During this time it has not been as active in purchasing pathology groups as it had in the years following its organization in 2006.

Acquisition Capital

However, that may be changing. Earlier this year, Aurora’s Executive Vice President Bruce Walton said Aurora has the capital to acquire pathology labs and practices and is seeking strategic opportunities. “Consolidation is coming to our industry and we believe we are well-positioned for that consolidation,” he said.

Consolidation of anatomic pathology groups will be one of the dominant trends in coming years. Shrinking reimbursement and the shift to integrated care organizations will mean less revenue for independent pathology groups.

Particularly vulnerable are smaller anatomic pathology groups that have five or fewer physicians. For these reasons, THE DARK REPORT expects to see a growing number of independent pathology groups take steps to sell or merge. (See TDRs, February 24 and March 17, 2014.)


Leave a Reply


You are reading premium content from The Dark Report, your primary resource for running an efficient and profitable laboratory.

Get Unlimited Access to The Dark Report absolutely FREE!

You have read 0 of 1 of your complimentary articles this month

Privacy Policy: We will never share your personal information.