Hospital Mergers Unlikely to be Affected by Antitrust Ruling

A unanimous U.S. Supreme Court ruling this week that makes it harder for local hospital authorities to claim immunity from federal antitrust laws will likely have little practical effect on most hospitals mergers taking place across the nation, observers say.

In a running two-year old legal battle, the Federal Trade Commission challenged as anticompetitive Phoebe Putney Health System, Inc.'s proposed $195 million acquisition of rival Palmyra Park Hospital, in Albany, GA from HCA.

The FTC alleged that Phoebe Putney constructed an elaborate scheme that used the Hospital Authority of Albany-Dougherty County, GA as a "straw man" to "cloak private, anticompetitive activity in governmental guise in the hopes that it would exempt the acquisition from federal antitrust law."

In June, 2011 a federal district judge ruled that the PPHS was immune from federal antitrust liability under the FTC Act and the Clayton Act. The FTC appealed the ruling to the 11th Circuit Court of Appeals but lost again.

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