Despite Supreme Court ruling, FTC will let Phoebe Putney keep hospital after all

Ruling includes some restrictions for Phoebe Putney

After fighting Phoebe Putney Health System all the way to the Supreme Court, the Federal Trade Commission (FTC) will allow the Georgia health system to keep Palmyra Park Hospital, with certain stipulations.

The road to the Supreme Court, and the verdict

Beginning in 2011, FTC argued that Phoebe Putney's $200 million acquisition of Palmyra created an anticompetitive climate in a six-county area of Georgia. According to FTC's complaint, the merger would allegedly allow the health system to raise prices for commercial health plans, which would harm patients, local employers, and employees.

After two lower courts in Georgia dismissed FTC's complaint, the issue was brought before the Supreme Court in 2012—and the government won.

However, FTC struck a deal with Phoebe Putney that allows the health system to keep Palmyra, which is now called Phoebe North Campus. Under the deal, Phoebe Putney is banned from challenging certificate-of-need (CON) applications filed by would-be competitors. The system is also required to notify FTC before acquiring more facilities or physician practices for the next 10 years. 

Reaction: Health system accepts relatively minor penalties

According to Thomas Chambless, Phoebe Putney's senior vice president and general counsel, the terms of the agreement were acceptable and enable the system to proceed with plans to invest in its under-utilized new hospital campus.

Meanwhile, antitrust lawyer Douglas Ross told Modern Healthcare that the new restrictions will not significantly affect Phoebe Putney because the system has already established dominance in the market.

The consent order is subject to public comment for 30 days before the commission makes it final (Blesch, Modern Healthcare, 8/22 [subscription required]).

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