Health Care Mergers: Time for the Supreme Court to Jump in?

Health care mergers, particularly hospital mergers, have been at the epicenter of the increase in antitrust activity in the health care industry over the past few years. The Department of Justice and the Federal Trade Commission, as well as state attorneys general, are focusing their attention on the health care industry, with a particular interest in monitoring, and often blocking, hospital mergers. Now, it looks like the U.S. Supreme Court might get involved in the debate. The DOJ and FTC’s increased scrutiny of hospital mergers has a hospital merger poised to possibly be the first merger matter taken on by the Supreme Court in more than 30 years, which could alter the antitrust landscape.

In late March, the FTC asked the Supreme Court to review the U.S. Court of Appeals for the Eleventh Circuit’s decision in FTC v. Phoebe Putney Health System . The Eleventh Circuit held that Phoebe Putney Health System’s $195 million acquisition of Palmyra Park Hospital in Albany, Ga., was permitted to proceed despite antitrust issues, because the acquisition was protected by the state action doctrine. The state action doctrine gives states and state agencies federal antitrust immunity under certain conditions.