The Federal Trade Commission sued to stop health care systems in Louisiana and Tennessee from consummating a $150 million acquisition because the commission or the U.S. Department of Justice weren’t notified before the merger.
The commission filed a petition for a temporary restraining order and preliminary injunction in the U.S. District Court for the District of Columbia against Louisiana Children’s Medical Center for integrating three competing hospitals in the New Orleans area that it recently acquired, according to an April 20 news release.
“Businesses that believe they can flout the law should be on notice: we will use the full scope of our authority to combat obstruction and to vindicate the FTC’s authority to investigate potentially illegal deals.” Commission Chair Lina Khan said in the release.
The petition also seeks to have the medical center hold the hospitals its acquired and related assets separate from its hospital system, pending an investigation by the commission, according to the release. The medical center must also give the commission “prior notice of certain transactions while the court resolves the agency’s dispute.”
Louisiana Children’s Medical Center, a nonprofit in New Orleans, La., that operates six hospitals, and HCA Healthcare Inc., a nationwide operator of health care facilities in Tennessee, reportedly defied the Hart-Scott-Rodino Act by not reporting the merger “to U.S. antitrust authorities and without observing the mandatory waiting period,” the release said.
The medical center announced Jan. 3 that it had finalized the acquisition of Tulane Medical Center, Lakeview Hospital and Lakeside Hospital from HCA without reporting it, the release reported.
Louisiana Children’s Medical Center and HCA Healthcare Inc., believe they have an exemption to the Hart-Scott-Rodino Act because they operated under a certificate of public advantage for acquisitions under Louisiana law, the release said.
“However, the FTC pointed out, the state’s grant of a COPA is not among the statutory exemptions under HSR Act and has not been recognized by any court as a basis for refusing to comply with the Act,” the release said.
