North Dakota Physician Groups Vow to Fight FTC Merger Suit

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By Liz Crampton

Two North Dakota health care providers said that they intend to fight a Federal Trade Commission antitrust lawsuit against their proposed merger, declaring the enforcement action “extremely frustrating.” ( Federal Trade Commission et al v. Sanford Health et al , D.N.D., No. 1:17-cv-00133, filed 6/22/17 )

The FTC June 22 sued to keep Sanford Health, a system headquartered in Sioux Falls, S.D., and Mid Dakota, a provider in Bismarck, N.D., from merging on the grounds it would violate antitrust law by significantly reducing competition for a number of health care services.

Sanford and Mid Dakota are each other’s closest rivals in a four-county area of North Dakota with a population of 125,000, the FTC said.

‘Honestly Shocked’

“We intend to vehemently defend our efforts to enhance medical care in central and western North Dakota,” said Craig Lambrecht, Executive Vice President of Sanford Bismarck, in a statement provided to Bloomberg BNA.

“This partnership is good for patients, the community, and anyone who would come to us in their time of need. We are honestly shocked that the FTC and attorney general would continue to deprive people of access to enhanced medical care for an unknown period of time. It just doesn’t make any sense.”

Shelly Sheifer, chairman of Mid Dakota Clinic, said, “The best way to describe our reaction is that we are exasperated with the delay that the FTC’s inquiry has already caused and that these proceedings will continue to cause.”

Talks on the deal began last September.

Eye on Health Care

FTC antitrust regulators have increasingly had their eye on health care mergers involving physicians groups. Earlier this year, the FTC cleared a health care merger in Minnesota that combined competing physicians groups, but with the condition that one of the providers release some physicians from non-compete agreements to lessen the deal’s competitive impact.

Referring to the North Dakota case, the FTC’s acting director of the competition bureau Tad Lipsky said, “This merger is likely to reduce significantly the competitive options available to medical insurance providers, which in turn will lead to deteriorating terms for provision of medical care, including higher prices and lower quality.”

“The parties currently compete to join commercial insurers’ provider networks, stimulating each other to improve their technology, expand services, recruit high-quality physicians, and provide patients with convenient and accessible physician and surgical services. The transaction would eliminate that competitive pressure,” Lipsky added.

The case is filed in the U.S. District Court for the District of North Dakota. The judge assigned to the case, Daniel Hovland, has had 84.4 percent of his decisions affirmed on appeal, according to Bloomberg Law’s Litigation Analytics

To contact the reporter on this story: Liz Crampton in Washington at lcrampton@bna.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bna.com

For More Information

Bloomberg Law subscribers can access Litigation Analytics at http://src.bna.com/p8J

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