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FTC, Phoebe case may be moving toward settlement

Phoebe North is now located at the former location of Palmyra Medical Center at 2000 Palmyra Road in Albany.

Phoebe North is now located at the former location of Palmyra Medical Center at 2000 Palmyra Road in Albany.

ALBANY, Ga. - An order granting a request to certify a joint motion to withdraw from adjudication the case of the Federal Trade Commission's opposition to the Hospital Authority of Albany-Dougherty County's purchase of the former Palmyra Medical Center indicates a settlement may be in the works.

On June 10, a joint motion was filed to temporarily withdraw the matter from adjudication for 30 days "for the purpose of considering a proposed consent agreement."

On the FTC website is a listing of court documents pertaining to the case showing that a consent proposal was attached to the joint motion, the contents of which have been redacted from public access.

This development follows a stipulated preliminary injunction order that was entered into by the U.S. Court for the Middle District of Georgia the previous week as a means to maintain the status quo and stop further integration of Phoebe Putney Memorial Hospital and the former Palmyra, now known as Phoebe North, pending the results of the administrative trial.

The order, signed by Chief Administrative Law Judge D. Michael Chappell on June 11, notes that a reasonable possibility of settlement exists in the matter involving the $195 million purchase of Phoebe North by the Hospital Authority that went through in December 2011.

An administrative trial had been set to begin Aug. 5. A previous stay on administrative proceedings that had been put in place in July 2011 was lifted after a Feb. 19 unanimous ruling from the U.S. Supreme Court in the FTC's favor. The high court found that the state action doctrine did not immunize the Palmyra acquisition from federal antitrust laws, in turn bringing forth renewed motions from the FTC in the case that resulted in the temporary restraining order and preliminary injunction being issued.

A spokesman for the FTC said Monday that the agency would have no immediate comment on the development.

Rick Smith, corporate director of marketing and public relations at Phoebe, said Monday that the hospital would be unable to comment because of pending litigation.

Kevin Grady, adjunct professor of law at the University of Georgia, is among those who have been following the case from afar. He said in an interview with The Albany Herald on Monday that if the FTC is still trying to restore the competitive status quo and with Hospital Corporation of America — the former owner of Palmyra — now out of Albany, a settlement could potentially involve bringing in a third party to take over the operations of the former Palmyra.

"It is a very, very messy situation," Grady said. "Even if settlement discussions fall through, then it will go back on the administrative docket and the FTC will have to prove it is anticompetitive. They would have to show, indeed, that Palmyra in its current situation is not a dead hospital."

A third party operator of the hospital "is the only settlement that makes any sense" in this situation, he said. "If the goal of the FTC is to restore the hospital to its previous condition, (there needs to be) another to operate the Palmyra campus."