Health Law Alert: SPECIAL FOCUS ANTITRUST: Recent Enforcement Actions: Physician Group Mergers

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Typically, physician group mergers have received less attention from the enforcement agencies than hospital mergers, likely because the transactions are usually small and thus are not reportable under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act or simply have not warranted investigation relative to larger transactions. Consequently, no physician merger challenges have been litigated, nor have any resulted, at least recently, in Federal Trade Commission (FTC) or Department of Justice Antitrust Division (DOJ) consent decrees. This appears to be changing, particularly as hospitals increasingly acquire physician groups and employ the formerly independent physicians. Notwithstanding the smaller nature of the transactions, FTC Bureau of Competition Director Richard Feinstein recently stated in connection with the FTC's investigation of one such hospital-physician merger that the FTC would "aggressively enforce the antitrust laws to ensure that consolidation among health care providers will not increase health care costs in local communities across the United States." Consistent with his statements, the FTC and states Attorneys General have recently investigated and/or challenged several physician practice-group mergers, and two of those challenges have been resolved by state Attorney General consent decrees.

Providence Health's Acquisition of Spokane, WA, Cardiology Practices -

On July 21, 2010, Providence Health & Services (Providence) announced its intention to acquire two cardiology physician clinics, Spokane Cardiology and Heart Clinics Northwest, located in Spokane, Washington, in a merger that did not have to be reported to the FTC because it did not meet the HSR threshold. Providence planned to acquire the assets of each cardiology practice group and subsequently to employ all, or virtually all, of their affiliated physicians. The FTC and the Washington Attorney General's Office initiated an investigation of the transactions in August 2010.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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