The Federal Trade Commission has rejected a proposed settlement agreement with Albany, Ga.-based Phoebe Putney Health System.
In 2011, the FTC filed a complaint challenging the merger of Phoebe Putney and Palmyra Park Hospital in Albany, Ga. The complaint alleged the merger would significantly reduce competition for acute care hospital services in Albany, Ga., and the surrounding area. The complaint further alleged the reduction in competition would have a number of negative effects, including raising prices.
In 2013, Phoebe Putney and the FTC reached a preliminary agreement that allowed Phoebe Putney to retain Palmyra Park. Subsequently, in a letter to the Georgia Department of Community Health, the FTC said it preliminary agreed to the non-divesture settlement because it believed Georgia's certificate of need laws would prevent the decoupling of the merged hospitals, even if the FTC won the suit.
However, based on public comments received and other information, the FTC now believes Georgia's certificate of need laws may not preclude Phoebe Putney from divesting Palmyra Park. Therefore, in a 3-0-2 vote, the FTC decided to withdraw its acceptance of the proposed consent agreement and return the matter to administrative litigation.
"We've argued all along that this merger would create a monopoly in Albany that would harm consumer and employers in the region," said Deborah Feinstein, director of the FTC's Bureau of Competition. "Meaningful structural relief is needed to restore competition to this marketplace."
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