On September 5, 2014, the Federal Trade Commission (FTC) rejected a proposed settlement agreement with Phoebe Putney Health System, Inc., and returned the matter to administrative court to assess whether Phoebe Putney’s 2011 merger with rival hospital Palmyra Park Hospital, Inc. in Albany, Georgia violated the antitrust laws.  

The FTC challenged the merger in 2011, and in February 2013, the FTC achieved a 9-0 win at the Supreme Court that the merger was not exempt from antitrust scrutiny on state action grounds.  In August 2013, the FTC and the parties reached a “non-structural” settlement, which did not require the parties to divest any assets.  The FTC usually disfavors these types of settlements, but accepted the settlement for public comment based on the understanding that Georgia’s Certificate of Need (CON) laws would prevent structural relief.

According to the FTC, it now appears that Georgia’s CON laws do not preclude structural relief, and the FTC, therefore, voted to withdraw its acceptance of the proposed consent agreement and return the matter to administrative litigation.

The FTC’s press release and related documents are available here.

Reporter, John Carroll, Washington, D.C., + 1 202 626 2993, jdcarroll@kslaw.com.