On April 22, 2014, a three-judge panel for the 6th U.S. Circuit Court of Appeals unanimously ordered ProMedica Health System to unwind its merger with a local Ohio hospital, upholding a Federal Trade Commission order that the acquisition was anticompetitive. ProMedica Health Sys., Inc. v. FTC, No. 12-3583, 2014 U.S. App. LEXIS 7500 (6th Cir. Apr. 22, 2014).
ProMedica is a nonprofit health care system based in Ohio that signed an agreement in 2010 to merge with St. Luke's community hospital. While the transaction did not trigger the Hart-Scott-Rodino premerger notification thresholds, the FTC nevertheless opened an investigation in 2010, and then moved to block the merger out of a concern that ProMedica would increase prices for inpatient services. Although ProMedica felt its acquisition helped the Toledo, Ohio, community by saving St. Luke's from insolvency, the FTC disagreed. The FTC's victory closes a four-year dispute, where it obtained a preliminary injunction precluding additional integration, won at trial, survived an appeal to the full Commission, and survived another to the 6th Circuit, which found the Commission's decision was "supported by substantial evidence in the record."
The 6th Circuit's decision hands another win to the FTC in healthcare provider cases and signals an uphill regulatory path for merging hospitals that seek more bargaining power when they negotiate with insurers. Despite the absence of significant legal obstacles to hospital consolidation in the 1990s and the justifications the Affordable Care Act may provide to merging providers, it is clear that FTC continues to aggressively enforce the antitrust laws in this sector of the economy.
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