Thursday, June 28, 2012
The U.S. Supreme Court has agreed to consider an appeal from the Federal Trade Commission (FTC), which has been stymied in its attempts to challenge a hospital merger in Georgia.
Phoebe Putney Health System announced in 2010 that it would merge with its largest competitor, HCA Inc.’s Palmyra Park Hospital. The plan called for a special hospital authority created by the city of Albany and Dougherty County to buy the hospital and then hire Phoebe Putney to operate it for $1 a year for 40 years.
The FTC and Georgia’s state attorney general objected to the move, claiming it would create a local monopoly, reduce competition in the acute-care hospital market and allow Phoebe to raise its rates.
Hospital lawyers countered by citing a Georgia law that bars application of federal antitrust laws against local monopolies created by hospitals mergers.
A district judge sided with the hospital and dismissed the FTC’s lawsuit. The 11th Circuit Court of Appeals affirmed the lower court ruling in December 2011, prompting the FTC to petition the U.S. Supreme Court to hear the matter.
In its petition to the Supreme Court, the FTC accused the Hospital Authority of Albany-Dougherty County of having “’Rubberstamped the transaction’ and used the Authority as a “strawman’” to protect Phoebe Putney form antitrust litigation.
-Noel Brinkerhoff
To Learn More:
Hospital Monopoly Law Faces Supreme Scrutiny (by Travis Sanford, Courthouse News Service)
Supreme Court to Review Phoebe Putney Purchase of Palmyra (by Jeff Bliss, Bloomberg News)
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