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Administrative Law Judge delays hearing in Phoebe/Palmyra merger

WASHINGTON -- An administrative law judge who will hear the Federal Trade Commission's review of Dougherty County acquiring Palmyra Medical Center has delayed the September hearing date until the FTC's appeal of a U.S. District Court ruling is heard.

The decision comes after lawyers for Phoebe Hospital Corporation of America Inc., which owns Palmyra, and the Hospital Authority of Albany-Dougherty County filed a motion July 1 asking for the delay.

"The petition was filed to prevent the burden and expenditure of considerable resources in preparing the case for the September hearing in Washington. It also allows the Authority to focus on the critical issue of state action immunity in the Court of Appeals," Phoebe officials said in a statement emailed to reporters late Friday afternoon.

"This action will leave everything in a status quo while the matter is briefed and considered on an expedited basis by the appellate court. Oral argument will be scheduled the week of Oct. 3 in Atlanta," Phoebe officials said.

Officials with the FTC, who have fought the merger, emphasized Friday that the stay of the administrative judge hearing was temporary.

"It's just stayed. Its not pulled out of part 3; it's not stopped permanently. It's just a temporary step," Mitchell Katz, spokesman for the FTC, said.

Chief Administrative Law Judge D. Michael Chappell signed the order July 7, but it was just made public Friday.

The 11th U.S. Circuit Court of Appeals in Atlanta granted the FTC's request for an emergency injunction and expedited appeal after U.S. District Court Judge Louis Sands in Albany ruled on June 27 that Phoebe could go ahead with the $195 million deal.

Sands said the Hospital Authority, which is making the purchase, is immune to oversight from the FTC.

The FTC is arguing that the county's purchase purchase of Palmyra, which would then be operated by Phoebe, would create a health care monopoly in Southwest Georgia, giving the hospital an 86 percent portion of the area's health care market share, creating a non-competitive environment in which health care prices would soar.

The FTC officials also argue that Phoebe structured the agreement intentionally to avoid antitrust scrutiny by using the Hospital Authority in a way that would shield the purchase from pre-merger approval by the FTC under the state action doctrine.

Phoebe officials counter that the sale is a mutually agreed upon arrangement between HCA and the Hospital Authority, and that the hospital is at a crossroads to either buy additional space or build -- a much more expensive undertaking, according to Phoebe CEO Joel Wernick.