The Federal Trade Commission and the Department of Justice have released their annual report summarizing their enforcement activities under the Hart-Scott-Rodino Antitrust Improvements Act for fiscal year 2014.
Here are five things to know about the two agencies' enforcement activities last fiscal year.
1. Under the Hart-Scott-Rodino Antitrust Improvements Act, parties to certain proposed acquisitions are required to report the transaction to the FTC and the Antitrust Division of the DOJ. Once the transaction is reported, the parties then must observe a statutory waiting period before completing the deal, according to JD Supra Business Advisors report. The waiting period gives the agencies time to do a preliminary antitrust review of the proposed transaction. The FTC and the DOJ then have the opportunity to challenge transactions that raise antitrust concerns.
2. During FY 2014 — which began Oct. 1, 2013 and ended Sept. 30, 2014 — there were a total of 1,663 transactions reported under the Hart-Scott-Rodino Antitrust Improvements Act's Premerger Notification program. That represents a 25 percent increase over the year prior. The number of transactions involving hospitals and other ambulatory healthcare service facilities were relatively flat in FY 2014 as compared with the year prior, according to the report.
3. The report highlighted a few challenges to healthcare transactions, including Boise, Idaho-based St. Luke's Health System's acquisition of Saltzer Medical Group in Nampa, Idaho. St. Luke's 2012 acquisition of the medical group was challenged by the FTC, and in January 2014, a federal judge ordered St. Luke's to reverse its acquisition of Saltzer. Two of St. Luke's competitors, Saint Alphonsus Health System and Treasure Valley Hospital, both in Boise, and the Idaho attorney general were also plaintiffs in the case. In February, the Ninth Circuit Court of Appeals upheld the federal judge's ruling.
4. The report also featured Toledo, Ohio-based ProMedica Health System's acquisition of Maumee, Ohio-based St. Luke's Hospital. ProMedica and St. Luke's merged in August 2010. Five months after the merger, the FTC challenged it. Subsequently, an administrative law judge and later the FTC concluded the merger would adversely affect competition in Lucas County. As a result, the FTC ordered ProMedica to divest St. Luke's, as it concluded divesture would be the best means to preserve competition. An appeals court upheld the FTC's order in April 2014. ProMedica appealed the ruling to the U.S. Supreme Court, but the high court refused to hear the case.
5. The report also highlighted additional healthcare transactions that were challenged in FY 2014 but resolved by the divestiture of certain assets, including Franklin, Tenn.-based Community Health Systems' acquisition of Health Management Associates.
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