On 4/20/2011, the FTC challenged Phoebe Putney Health System, Inc.’s (Phoebe’s) proposed acquisition of rival Palmyra Park Hospital, Inc. (Palmyra) from HCA, in Albany, Georgia. The FTC’s administrative complaint alleges that the deal will reduce competition significantly and allow the combined Phoebe/Palmyra to raise prices for general acute-care hospital services charged to commercial health plans, substantially harming patients and local employers and employees. The FTC also alleges that Phoebe has structured the deal in a way that uses the Hospital Authority of Albany-Dougherty County (the Authority) in an attempt to shield the anticompetitive acquisition from federal antitrust scrutiny under the “state action” doctrine. The FTC’s staff, together with the Attorney General of the State of Georgia, filed a separate complaint in federal district court in Albany, Georgia, seeking an order to halt any transaction involving Phoebe, the Authority, or Palmyra, under which Phoebe would acquire control of Palmyra’s operations, until the conclusion of the FTC’s administrative proceeding and any subsequent appeals. On 2/19/2013, the Supreme Court reversed the judgment of the Court of Appeals and remanded further proceedings. On June 27, 2011, the district court denied the motion for a preliminary injunction on the grounds that the transaction was protected by the state action doctrine. On December 14, the Eleventh Circuit affirmed. In February 2013, the Supreme Court reversed, finding that the state of Georgia had not clearly articulated a policy that would permit the Hospital Authority to approve anticompetitive mergers.
On 3/14/2013, the Commission issued an order granting complaint counsels motion to lift the stay on administrative proceedings. On 4/9/2013, an amended complaint and renewed motions for a PI and TRO were filed in federal district court in Georgia, pending an 8/5/2013 administrative trial. On 5/15/2013, the U.S. District Court for the Middle District of Georgia granted the FTC’s motion for a temporary restraining order. On 6/25/2013, the Commission granted the motion to withdraw the matter from Part III, and accepted for public comment a proposed settlement of its charges. Due to the unique circumstances of the Certificate of Need (CON) laws in Georgia, the Commission originally believed it was unable to require that the hospitals become independent competitors. On 9/5/2014, based on public comments received, as well as other information, the Commission determined that Georgia’s CON laws may not preclude structural relief, and voted to withdraw its acceptance of the proposed consent agreement and return the matter to administrative litigation. On 3/31/15, the FTC entered into a settlement agreement requiring Phoebe Putney and the Hospital Authority must notify the FTC in advance of acquiring any part of a hospital or a controlling interest in other healthcare providers in the Albany, Georgia area for the next 10 years, and prohibiting them from objecting to regulatory applications made by potential new hospital providers in the same area for up to five years. The settlement is similar to the one proposed in 2013 and does not require structural relief.