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Phoebe Putney, Hospital Authority Settle FTC Charges

John Commins, for HealthLeaders Media, August 23, 2013

Owing to a conflict with Georgia's stringent Certificate of Need laws, the FTC will grudgingly drop its attempts to nullify Phoebe Putney's 2011 acquisition of rival Palmyra Park Hospital from HCA for $195 million.

A two-year antitrust investigation launched by the Federal Trade Commission against Georgia's Phoebe Putney Health System and the Hospital Authority of Albany-Dougherty County has ended with a settlement that has both sides claiming victory.

Owing to a conflict with Georgia's stringent Certificate of Need laws, the FTC will grudgingly drop its attempts to nullify Phoebe Putney's 2011 acquisition of rival Palmyra Park Hospital from HCA for $195 million. Phoebe Putney will keep the hospital, now called Phoebe North Campus, but the health system and the Authority may not for the next five years contest potential competitors providing additional acute care services in the six-county area around Albany, GA.

Phoebe Putney and the Authority said the settlement allows them to object to CON applications for other projects, but they have agreed to tell the FTC when they do. The hospital will provide the FTC with annual compliance reports for the provisions for 10 years. The two sides expect to finalize the consent agreement within 30 days.

The FTC had sought to have the acquisition voided and another buyer found for Palmyra, but learned that doing so would prompt a Certificate of Need review from the state of Georgia. "Unfortunately, Albany is deemed ‘over-bedded' by Georgia's strict need assessment criteria making it unlikely that any possible divestiture buyer could obtain the necessary CON approval to operate an independent hospital," the FTC said in a media release.

Phoebe Putney said the consent agreement will stipulate that the FTC made no findings that the hospital or the Authority violated antitrust laws. "Instead, solely to achieve a compromise with the FTC, and for purposes of these proceedings only, Phoebe Putney and the Hospital Authority have stipulated that the acquisition of Palmyra might substantially lessen competition within the service and geographic markets alleged by the FTC," the hospital said in a media release. "The settlement expressly reserves the rights of Phoebe and the Authority to contest that allegation in any other proceeding"

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