Bill offered to close hospital authority loophole

ATLANTA &#8212 Weeks before the U.S. Supreme court handed down a ruling critical of Georgia’s law regarding hospital authorities and antitrust scrutiny, state lawmakers authored a bill they believe closes the loophole and will keep the federal government out of the medical merger business.

HB 230 is authored by six legislators including Rep. Jay Powell, R-Camilla, and Rep. Ed Rynders, R-Leesbug, and corrects Georgia law so that “hospital authorities created thereunder are acting pursuant to state policy; to articulate clearly and express affirmatively, and to clarify that it is and has been, the policy of the State of Georgia that such hospital authorities in the exercise of the powers specifically granted to them in Article 4 of Chapter 7 of Title 31 shall be immune from antitrust liability to the same degree and extent as enjoyed by the State of Georgia.”

In the opinion written Tuesday by Justice Sonya Sotomayor, all nine justices concur that Georgia law isn’t “clearly articulated” or affirmatively expressed.

“Under this Court’s state-action immunity doctrine, when a local governmental entity acts pursuant to a clearly articulated and affirmatively expressed state policy to displace competition, it is exempt from scrutiny under the federal antitrust laws,” the opinion begins. “In this case, we must decide whether a Georgia law that creates special-purpose public entities called hospital authorities and gives those entities general corporate powers, including the power to acquire hospitals, clearly articulates and affirmatively expresses a state policy to permit acquisitions that substantially lessen competition.

“Because Georgia’s grant of general corporate powers to hospital authorities does not include permission to use those powers anticompetitively, we hold that the clear-articulation test is not satisfied and state action immunity does not apply.”

The bill was first introduced Feb. 6.

Rynders said Tuesday afternoon that he joined the bill when Powell brought it to him weeks ago because it was “clearly and anti-Washington bill.”

“At the end of the day I don’t want a Washington agency dictating healthcare decisions in the state,” Rynders said. “If Archbold wanted to buy a hospital in Mitchell County they should be able to do that without interference from Washington. I don’t care who the hospital is.”

“I don’t want large healthcare conglomerations forming all over the state, but not having local control and access scares me more,” Rynders said.

Rynders said that the other sponsors of the bill, Mickey Channell, R-Greensboro, Jason Shaw, R-Lakeland, Richard Smith, R-Columbus and Stacey Abrams, D-Atlanta, were mostly from rural areas that understand the challenges facing small community health organizations.

Powell and Rynders each have received campaign contributions totaling thousands of dollars from health-related organizations and individuals since 2010, according to the Georgia Government Transparency and Campaign Finance Commission website, including donations from the Georgia Alliance of Community Hospitals, various health insurance organizations and, for Rynders specifically, donations from Phoebe CEO Joel Wernick, CFO Kerry Loudermilk for $250 each and from Hospital Corporation of America, Palmyra’s parent organization.

Those donations, on Rynders end at least, came mostly when Rynders was vice chair of the state health and human relations committee. He is now secretary of the committee.