The Federal Trade Commission recently sued to stop the potentially illegal integration of New Orleans area hospitals over failure to follow federal reporting law.
According to an April 20 news release, the Louisiana Children's Medical Center and HCA Healthcare Inc. were sued for violating federal law by completing the $150 million acquisition without disclosing it to U.S. antitrust authorities and without adhering to the required waiting period.
"We are seeking to hold LCMC accountable for disregarding the law by ignoring filing requirements and prematurely consummating their deal," FTC Tech Chair Lina Khan said in the 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."
The FTC sought to prevent LCMC from integrating the three rival hospitals it recently acquired in the New Orleans region, the release reported. While the court adjudicates the agency's dispute, the FTC is requesting a temporary restraining order and a preliminary injunction requiring LCMC and HCA to comply with the Hart-Scott-Rodino Act, that LCMC holds the three acquired hospitals and related assets separate from its current hospital system and that LCMC give the FTC prior notice of certain transactions.
A network of six hospitals in the greater New Orleans area is run by the nonprofit LCMC, which has its headquarters in New Orleans, the release reported. LCMC reported it had successfully acquired Tulane Medical Center, Lakeview Hospital and Lakeside Hospital Jan. 3. The hospitals were acquired from HCA, a national operator of healthcare facilities based in Tennessee.
Given the magnitude of the parties involved and the $150 million worth of LCMC's acquisition of HCA, the transaction required reporting to federal antitrust agencies, according to the release. The agency said LCMC and HCA completed the transaction without ever informing the agencies.
The HSR Act mandates that parties to a merger that exceeds specific size thresholds report their proposed transactions to the agencies and observe a waiting period to give the commission an opportunity to review the transaction and decide whether to investigate the transaction further, the release said. This is done to facilitate the FTC and DOJ's review of certain large transactions.
