Although the challenging and dynamic environment facing many hospitals and the requirements of the Affordable Care Act might suggest that the Federal Trade Commission (“FTC”) will displace or rethink traditional antitrust analysis for hospital mergers, the FTC recently made clear that any hospital merger resulting in high market shares faces a steep uphill climb to win FTC approval.

During the same week that the constitutionality of the Affordable Care Act was being argued before the Supreme Court, the FTC, on March 28, 2012, announced its decision to block ProMedica Health System acquisition of St. Luke’s Hospital (“ProMedica” and “St. Luke’s”).

The ProMedica decision continues the agency’s active enforcement in the hospital area. In March 2012, the Solicitor General, at the request of the FTC, filed a petition for certiorari in the Phoebe Putney case, seeking to have the Supreme Court consider whether the State Action Defense protects, from antitrust scrutiny, an otherwise anti-competitive acquisition by a government-owned hospital, where the hospital is leased to and operated by a private entity. In addition, the agency obtained a preliminary injunction blocking a hospital acquisition in Rockford, Illinois pending an administrative trial.

Please see full alert below for more information.