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December 8, 2020

Around the nation: FTC challenges proposed merger between Hackensack Meridian Health, Englewood Healthcare Foundation

Daily Briefing

    The Federal Trade Commission is seeking to block a proposed merger between two health systems—Hackensack Meridian Health and Englewood Healthcare Foundation—in Bergen County, New Jersey, in today's bite-sized hospital and health industry news from California, the District of Columbia, Maryland, and New Jersey.

    • California/District of Columbia/Maryland: The Biotechnology Innovation Organization (BIO), Pharmaceutical Research and Manufacturers of America (PhRMA), and other groups representing the life sciences industry, physicians, and patients on Friday filed two separate lawsuits in Maryland and California challenging an interim final rule aimed at lowering prescription drug costs in America by aligning certain Medicare Part B drug prices with lower prices paid in other countries. Under the interim rule, CMS' Center for Medicare and Medicaid Innovation beginning Jan. 1, 2021, will implement and test a new, seven-year payment model—called the Most Favored Nation Model—which will be mandatory for physician practices and hospital outpatient departments nationwide. The two lawsuits claim that courts should block the interim final rule because, among other reasons, the Trump administration failed to follow the appropriate regulatory process when issuing the rule. The White House did not immediately respond to a request for comment on the lawsuits, Reuters reports (Wilkerson, Inside Health Policy, 12/4 [subscription required]; Florko, STAT News, 12/4; O'Donnell/Erman, Reuters, 12/4).
    • District of Columbia/New Jersey: The Federal Trade Commission (FTC) on Thursday filed an administrative complaint seeking to block a proposed merger between two health systems—Hackensack Meridian Health and Englewood Healthcare Foundation—in Bergen County, New Jersey. In the complaint, FTC claimed the proposed merger would constrain competition in the county's acute care market by creating a single organization that operates three of the county's six inpatient general acute care hospitals. FTC in the complaint also claimed that the merger would allow Hackensack to seek higher payment rates from insurers, which could increase out-of-pocket costs for consumers and raise insurance premiums, copayments, and deductibles. Hackensack and Englewood executives expressed disappointment over FTC's complaint, saying the proposed merger could help to lower costs, increase access to care, improve quality of care, and boost population health initiatives in Bergen County, Modern Healthcare reports. In a joint statement, the health care systems said, "We plan to vigorously defend the merger in court, which will give us the opportunity to further demonstrate the benefits Hackensack Meridian Health and Englewood Health will achieve together." FTC in a release said a trial on the matter is scheduled to begin on June 15, 2021 (Kacik, Modern Healthcare, 12/4; FTC release, 12/3).
    • District of Columbia: The Supreme Court on Friday announced that it will hear a case regarding lawsuits filed over, and lower court rulings striking down, Medicare work requirements in Arkansas and New Hampshire. The Supreme Court will consider the Trump administration's and states' appeals seeking to reverse lower court rulings that overturned the administration's approval of Medicaid work requirements in Arkansas and New Hampshire. According to Politico, the case and any subsequent rulings ultimately could be moot, however, because even if the Supreme Court rules in favor of the Trump administration in the case, President-elect Joe Biden's administration likely will reject any new requests for Medicaid work requirements and may revoke existing approvals (Stein, Inside Health Policy, 12/4 [subscription required]; Luthi, Politico, 12/4).

    Next: Maybe we shouldn't believe the hype about hospital mergers and acquisitions

    The past few years of mergers and acquisitions have seemingly created a new dichotomy for hospital and health system leaders: Either merge or risk losing market relevance. But are mergers and acquisitions really an answer to today's health care challenges?

    Here are three ways the evidence often doesn't live up to the hype.

    Get the Insight


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