On March 31, 2015, the Federal Trade Commission (FTC) entered into a settlement with Phoebe Putney Health System, Inc. (Phoebe Putney), the Hospital Authority of Albany-Dougherty County, and HCA Inc., finally resolving the matter after years of litigation in which the FTC alleged that the combination of Phoebe Putney and Palmyra Park Hospital (Palmyra) violated the antitrust laws.
The settlement follows a significant Supreme Court victory for the FTC in 2013 that allowed the FTC’s challenge of the transaction. Nonetheless, Phoebe Putney’s acquisition of Palmyra Park will not be unwound despite the FTC’s longstanding preference for “structural” settlements. Instead, the settlement contains a number of conduct restrictions, including, among other things, requiring Phoebe Putney to notify the FTC in advance of acquiring any part of a hospital or a controlling interest in other healthcare providers in the Albany, Georgia area for the next 10 years, and prohibiting Phoebe Putney from objecting to regulatory applications made by potential new hospital providers in the same area for up to five years. Notably, however, the settlement does not impose restrictions on pricing or create firewalls for separate negotiations between each hospital and commercial payors, which was part of the remedy in the FTC’s settlement with Evanston Northwestern Healthcare Corporation in its acquisition of Highland Park Hospital in 2007.
The settlement is available here.
Reporter, John D. Carroll, Washington, D.C., +1 202 626 2993, jdcarroll@kslaw.com.
