Avoiding Antitrust Pitfalls in Hospital Acquisitions of Physician Practices

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More and more hospitals are purchasing physician groups and employing physicians to boost referrals and admissions and to position themselves to create ACOs and respond to the demands of health care reform and changing markets. As acquisitions increase, so does FTC and state Attorney General scrutiny.

Ober|Kaler health care antitrust lawyer Bill Berlin presented this webinar focusing on how to manage physician acquisitions and any ensuing government investigation while avoiding antitrust pitfalls. The program was moderated by Ober|Kaler health lawyer Steve Smith.

Bill represented Renown Health of Reno, Nevada in a precedent-setting FTC settlement of an investigation into its physician group acquisition. After Renown Health acquired two cardiology practices and employed the cardiologists, the FTC and Nevada Attorney General's office filed antitrust complaints against the hospital system, arguing the arrangements gave Renown too much market share and control over Reno's cardiology services market. A settlement reached last month required Renown to temporarily suspend the noncompete provisions in its employment agreements with the cardiologists to permit some of the doctors to depart Renown to practice elsewhere in Reno, while allowing the system to avoid potentially more restrictive limitations on its activities. It is the first FTC settlement of an investigation into a physician group acquisition. The case received widespread media coverage and offers rare guidance to hospitals and physicians who are considering merging.

In This Presentation:

Today’s Focus: Types of Affiliation and Parties: Poll: Do you primarily work for or represent a hospital or physicians? 1.Hospital or health system; 2.Physician group; 3.Other; Today’s Focus: Types of Affiliation and Parties: - Focus today is on hospital acquisition and employment of physicians; - But much of presentation applies equally to physician group mergers; - Focus is on full mergers resulting in hospital ownership of assets and employment of physicians (vs. less-thanfully integrated JVs); - ACO Antitrust Policy Statement does not apply to fully-merged entities so do not address ACOs today; - Horizontal vs. vertical (or, here, both) mergers; Increasing Trend in

Hospital Acquisitions of Physician Groups; Full Merger vs. Less Integrated Affiliation; Resulting Increase in Agency Enforcement; Physician Merger Challenges: Recent Enforcement; Quick Overview of Applicable Law; Renown Merger Background; Early/Pre-closing Do’s and Don’ts; Renown FTC/NAG Investigation; Investigation Do’s and Don’ts; Renown Settlement; Renown Settlement Provisions; Conduct vs. Structural Remedies; Settlement Do’s and Don’ts; and, Bottom Line.

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