The American Hospital Association made its case before Congress Oct. 7 to pass the Standard Merger and Acquisition Reviews Through Equal Rules Act, which would address disparities between how the Federal Trade Commission and Department of Justice review mergers.
In the standardized process, the Federal Trade Commission would be required to rely exclusively on the federal courts to determine the competitiveness of a merger or acquisition. Under the act, if courts deny the FTC's request to delay a merger until it is reviewed, the agency would have to close its case, according to Politico.
AHA defended the need for the legislation in a statement submitted to the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights during the panel's hearing on the measure.
The AHA said the SMARTER Act is "narrowly crafted to accomplish one important outcome: to ensure that all proposed transactions face the same enforcement process and standard of review regardless of whether the FTC or the Antitrust Division of the Department of Justice reviews the transaction. The bill removes a deterrent to hospital integration and realignment, which is essential for success in the changing healthcare landscape."
Under the existing antitrust law, the FTC and DOJ face different standards in court and adhere to different processes when trying to prevent a proposed merger or acquisition. The SMARTER Act would require the DOJ and FTC to meet the same requirements to win preliminary injunctions against mergers, and would remove the FTC's administrative process for merger challenges after an injunction is denied.
Hospitals have been negatively affected by the FTC's ability to use its own internal administrative process to challenge a transaction, according to the AHA. "The additional time and financial burden of litigating a hospital transaction first at the preliminary injunction hearing and then in internal administrative proceedings has deterred many hospitals from pursuing potentially lawful and procompetitive transactions," the AHA said in its statement.