March 21, 2014

A federal judge recently ordered a hospital system to unwind its year-old acquisition of an independent physician practice, which created a “dominant provider” with “80% of the primary care physicians” in Nampa, Idaho. This is the first time the Federal Trade Commission (FTC) has successfully challenged a physician practice acquisition in federal court. The ruling reminds us that the FTC will challenge a health care transaction that it views as anticompetitive, even if the transaction does not involve a hospital merger, is not reportable under the Hart-Scott-Rodino Act, and has already closed. It also reminds us that even a transaction that lowers costs and increases quality of care may nonetheless violate the antitrust laws if it reduces competition and increases prices. The decision is Saint Alphonsus Medical Center – Nampa, Inc. v. St. Luke's Health System, Ltd., 1:12-CV-00560-BLW, 2014 WL 40446 (D. Idaho 2014).

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