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FTC asks high court to hear hospital challenge

WASHINGTON — The Federal Trade Commission confirmed Friday afternoon that it will seek to challenge before the U.S. Supreme Court the acquisition of Palmyra Medical Center by the Hospital Authority of Albany-Dougherty County.

The FTC voted unanimously this week to ask the Justice Department to request that the issue be brought before the nation’s highest court.

The agency contends that Phoebe Putney Memorial Hospital has improperly used what is known as the “State Action Doctrine” to shield the Hospital Authority from federal antitrust scrutiny in the $195 million acquisition.

If the Supreme Court accepts the case, the question before the court is whether the doctrine can shield anticompetitive conduct from entities seeking to merge with private organizations when the Hospital Authority wasn’t a party to the negotiations and doesn’t manage the assets on a day-to-day basis.

The authority in December 2010 authorized Phoebe Putney Health System to negotiate the deal to buy the private hospital owned by Hospital Corp. of America (HCA) and agreed that Palmyra’s former not-for-profit competitor, Phoebe Putney Hospital, would operate the facility. After a year of legal wrangling led by the FTC’s unsuccessful efforts to review the purchase under antitrust statutes, the authority was cleared to make the purchase this past December and Palmyra has been redesignated Phoebe North.

FTC officials contend the merger of Palmyra into the Phoebe system stifles health care competition in Dougherty County and Southwest Georgia, and that it will drive up health care prices and cost for consumers because of a lack of competition.

Phoebe has countered that the purchase was done out of a necessity for additional space, arguing that it would be cheaper for consumers in the area if that space were bought rather than built. Phoebe also argues that consolidation of medical facilities has been a priority under health care reform embraced by the president while shunned by the FTC.

“The law is clear, as decided by Judge (Louis) Sands and upheld by the 11th Circuit,” Phoebe Vice President for Communications Jackie Ryan said Friday. “We will be filing an opposition brief to this.”

On March 20, 2011, the FTC filed a complaint in federal district court against the purchase, arguing that it would reduce competition significantly and allow the combined Phoebe/Palmyra to raise prices for general acute-care hospital services charged to commercial health plans, harming patients and local employers and employees.

On June 27, the U.S. District Court for the Middle District of Georgia, Albany Division, dismissed the FTC’s complaint and denied its motion for a preliminary injunction to stop the deal from going forward. The FTC then appealed the District Court decision to the U.S. Court of Appeals for the 11th Circuit, which affirmed the judgment of the District Court on Dec. 9.

The filing of a challenge by the FTC doesn’t mean that the Supreme Court will agree to hear the case.

Comments

Sister_Ruby 2 years, 9 months ago

Joel REALLY gonna have to come up with some big money to pay the Supreme Court off, let me tellya! For once I'm on the side of the FEDS.

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Trustbuster 2 years, 9 months ago

I am glad the FTC has filed this writ challenging the 11th Circuit Court and District Court rulings. Phoebe is clearly engaged in reducing competition from other health providers. Ms. Ryan is a former WALB newscaster on the Phoebe payroll. Of course Phoebe doesn't like it since they benefit from a welfare and entitlement economy. GO FTC!

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Cartman 2 years, 9 months ago

I wonder if the Albany/Dougherty County Hospital Authority will even have a meeting over this. Didn't they try to feed us a line of crap about owning Palmyra and just leasing it to Phoebe. The whole charade is exposed. ....again. I hope the Supreme Court uses Wernick and the Phoebe Management as poster children examples to the rest of the healthcare administrators across the country who have ruined public hospitals with their greed. I'd like to see how much Phoebe spends in D.C. with an influential law firm to try and handle the Supreme Court. Bwwaaaa haaaaaaa! This news made my weekend. I know its only a Writ of Certiorari. The Supreme Court can opt not to hear the case. But we can dream - can't we?

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ObjectiveEyes 2 years, 9 months ago

It seems that the FTC really has the "bit in their mouth" about this one. Even Phoebe doesn't have deeper pockets than the federal government. That aside, anyone that has paid even a little bit of attention knows that the Authority has never held any control over the hospital. But, in fairness to all involved, at this point, what a mess this would be to unwind!

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Cartman 2 years, 9 months ago

It would be a mess to unwind. That is by design. That's why they rushed it through despite a lack of finality in the court rulings. But the resulting calamity might motivate a real staffing of the hospital board. Maybe we can have one that will force some accountability from Wernick and Loudermilk; instead of being a puppet board.

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Trustbuster 2 years, 9 months ago

Don't underestimate the power of corporations they are protected under the 14th Amendment like an individual. The high court stated this after Reconstruction. Some people at first thought the amendment only applied to African-Americans. Read "The Corporate History of America." Over the years the federal courts have applied equal protections to these business entities. Corporate power is enormous.

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MadDucks 2 years, 9 months ago

-“the purchase was done out of a necessity for additional space”- How does purchasing Palmyra increase the number of hospital beds or “space” in Albany? Albany is already losing businesses due to the high cost of medical care. Phoebe is like a cancer growing on South Georgia; they have “acquired” property after property using the State Action Doctrine to reduce completion in the area. We can’t afford a “Nonprofit” Hospital that has off shore bank accounts to keep all the profits they are making hidden from public view.

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