Stay current on the latest developments from agencies including the CFPB, Federal Reserve, FDIC, and OCC to advise clients on real-life regulatory situations.
By Liz Crampton
Virginia’s Department of Health Oct. 30 approved a merger of local hospitals opposed by the Federal Trade Commission, the latest health care deal protected from federal intervention.
Mountain States Health Alliance and Wellmont Health System, located on the border of Virginia and Tennessee, needed approvals from both state regulators for their merger. The Tennessee Department of Health signed off on the deal in September. Now the new health system, named Ballad Health, is immunized from federal antitrust action under state law.
The providers have been working for two years to convince state regulators that their merger will benefit patients, particularly ones in rural communities. But the FTC disagreed. An agency official testified last year that the merger would increase hospital prices and decrease the quality of care for patients. The FTC declined to comment on the Oct. 30 approval.
This conflict between federal and state regulators about the merger highlights a gray area of antitrust enforcement in the health care industry. Under state law, an approval for a merger of health providers can be granted if a state authority determines the benefits of a deal outweigh possible anticompetitive effects. This can occur regardless of whether the federal government thinks the transaction is anticompetitive.
In a letter to hospital CEOs, the Virginia Health Commissioner said “the benefits likely to result from the proposed cooperative agreement outweigh the disadvantages likely to result from a reduction in competition from the proposed cooperative agreement.” The commissioner noted that competition between Wellmont and Mountain states has “failed to provide meaningful, visible benefits” and “people in the region continue to struggle with access to primary and specialty care.”
The FTC generally opposes these types of laws because the agency believes they permit anticompetitive transactions that result in higher costs for patients. The agency encountered a similar roadblock a few years ago when it tried to stop a hospital merger in West Virginia.
After a lawsuit against the deal was filed in an in-house administrative court, the West Virginia state legislature passed a law allowing state authorities to monitor mergers that have the potential to reduce competition. As a result, the tie-up was protected from federal antitrust enforcement, and the agency was forced to drop its lawsuit.
To contact the reporter on this story: Liz Crampton in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Fawn Johnson at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)