FTC drops its chal­lenge of W. Vir­ginia hos­pi­tal merger

Modern Healthcare - - REGIONAL NEWS - —Lisa Schencker

The Fed­eral Trade Com­mis­sion is drop­ping its chal­lenge of a West Vir­ginia hos­pi­tal merger in light of the pas­sage of a state law meant to pro­tect the deal from fed­eral an­titrust scru­tiny.

The FTC filed a com­plaint last year al­leg­ing a deal by Ca­bell Hunt­ing­ton (W.Va.) Hos­pi­tal to ac­quire nearby ri­val St. Mary’s Med­i­cal Cen­ter would cre­ate a near mo­nop­oly on ser­vices that could lead to higher prices and lower qual­ity.

In March, how­ever, West Vir­ginia Gov. Earl Ray Tomblin signed a bill shield­ing hos­pi­tal merg­ers from state and fed­eral an­titrust scru­tiny, as­sum­ing they get cer­tain other state ap­provals.

Last week, the FTC voted unan­i­mously to aban­don the chal­lenge. The FTC said in a state­ment that it re­mains con­cerned about the merger but is walk­ing away from the fight be­cause of the new state law.

“This case presents an­other ex­am­ple of health­care providers at­tempt­ing to use state leg­is­la­tion to shield po­ten­tially an­ti­com­pet­i­tive com­bi­na­tions from an­titrust en­force­ment,” ac­cord­ing to the FTC state­ment. The agency said it be­lieves that laws such as the one in West Vir­ginia “are likely to harm com­mu­ni­ties through higher health­care prices and lower health­care qual­ity.”

The FTC also em­pha­sized, how­ever, that just be­cause the West Vir­ginia law led the com­mis­sion to dis­miss its com­plaint in this case doesn’t mean that it will do the same in sim­i­lar sit­u­a­tions in the fu­ture.

St. Mary’s Med­i­cal Cen­ter CEO Michael Sel­lards praised the FTC’s de­ci­sion in a state­ment, say­ing the ac­qui­si­tion will ben­e­fit the tris­tate re­gion. He said St. Mary’s will now seek Vat­i­can ap­proval so the deal may move for­ward.

Ca­bell Hunt­ing­ton Hos­pi­tal CEO Kevin Fowler and Monte Ward, chief fi­nan­cial and ac­qui­si­tion of­fi­cer, said in a state­ment that the merger will im­prove the qual­ity of health­care and al­low the hos­pi­tals to ex­pand ser­vices for pa­tients in their re­gion in a cost-ef­fi­cient man­ner.

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