Appeals Court to hear Palmyra case today

Palmyra Medical Center

Palmyra Medical Center

ATLANTA -- The Federal Trade Commission is scheduled to take its opposition to the purchase of Palmyra Medical Center by the Hospital Authority of Albany-Dougherty County to the 11th U.S. Circuit Court of Appeals today.

Last December, the Hospital Authority of Albany-Dougherty County authorized a $195 million acquisition of the private for-profit Palmyra from Hospital Corporation of America. Under the plan, the hospital would be renamed Phoebe North and operated as a not-for-profit by Phoebe Health System.

On June 27, U.S. District Court Judge Louis Sands ruled that the Hospital Authority was exempt from federal antitrust oversight. The FTC filed a brief with the Court of Appeals on July 27 and a reply brief on Aug. 23 stating that Sands erred in his ruling.

The FTC, which argues the purchase would "reward an overt scheme to evade the antitrust laws," contends that Phoebe, not the Hospital Authority, is the one with leverage in Albany over people and insurance companies, and that any statement to the contrary by Phoebe is merely a "smokescreen."

"Notwithstanding its assertions about serving state policies, PPMH has exercised its already-substantial leverage in negotiations with health plans to extract high commercial reimbursement rates," the reply brief stated. "And, on a rare occasion when one authority member questioned PPMH's pricing practices, he was admonished by the authority's chairman that 'the authority really has no authority as far as running the hospital.'

"This Court should brush aside defendants' smokescreen, and adhere to the time-tested adage: if it walks like a duck, quacks like a duck, and looks like a duck, then it's a duck.'"

A brief filed by Phoebe and the Hospital Authority on Aug. 17 argues that the FTC's complaint regarding the purchase is misplaced and that the acquisition would be in the best interest of Southwest Georgia residents.

In so doing, it drew a parallel with other government entities, noting: "For a Georgia hospital authority, acquiring and leasing a hospital is as much an act of governing as is passing an ordinance for a Georgia city council. In both cases, political subdivisions are exercising some delegated component of the total governing powers of the state."

At the time of the brief's filing, Phoebe CEO Joel Wernick made a statement to the same effect.

"Now more than ever the national health care landscape makes hospital consolidations and regional partnerships a necessary strategy to provide cost-effective, quality care to citizens," Wernick said in the statement. "This transaction is between a willing seller, HCA, and our community's Hospital Authority. We are looking forward to the court's ruling.

"We believe the U.S. Supreme Court has made it clear this transaction is beyond FTC meddling."


Trustbuster 4 years ago

The FTC is correct in their arguments to the appellate court. Phoebe has the real power in pricing and handling insurance not the hospital authority. I hope the judges will rule in favor of the FTC and dismiss Judge Sands ruling. The federal court judge demonstrated a clear bias in his ruling.


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