FTC Urges States to Stop Using COPA Laws to Shield Hospital Mergers From Antitrust Enforcement

Lori Kalani, Bernard Nash
Cozen O'Connor
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Cozen O'Connor

  • The FTC released a policy paper and fact sheet highlighting the negative impact Certificates of Public Advantage (COPAs)— state laws enacted to shield hospital mergers from federal antitrust enforcement in favor of regulatory oversight— can have on patient costs, patient care, and healthcare worker wages.
  • In its policy paper, the FTC concluded that most of the claimed benefits from COPAs do not materialize and that competition, rather than consolidation, results in better outcomes for patients and healthcare workers, as the concentrated healthcare markets that result from hospital mergers are more likely to result in higher prices for patients, lower wages for hospital employees, lowered quality of care and reduced access to healthcare services.
  • The FTC also noted how COPAs are often difficult for states to implement and monitor in practice, as effective oversight requires significant state resources over many years. Regulatory fatigue, staff turnover, changes in funding priorities and aggressive lobbying efforts from hospitals often result in decreased supervision over time or the eventual repeal of COPA oversight.  According to the FTC, the resulting effect is that merged hospital systems have increased market power without being constrained by either state regulation or federal antitrust enforcement, and the FTC therefore urges state lawmakers to avoid using COPAs to shield hospital mergers.

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