Phoebe Putney Health System, facing a wave of protests over its subpoenas to Georgia hospitals, has pared back its request for industry financial information as it pursues its legal fight with the Federal Trade Commission.
The Albany system, among other revisions, has reduced the “look-back’’ period for financial documents to three years from seven years requested in the subpoenas it recently sent to all hospitals in the state.
But the reduction of documents requested may not be enough to satisfy hospital officials around the state.
The Phoebe Putney subpoenas have forced a flurry of legal work for hospitals and created widespread concern about the scope and cost of such an effort.
Health care attorneys say the breadth of the request, and the fact that it includes all Georgia hospitals, is unprecedented in the state. “In my 43 years of experience, I’ve never seen anything like it,’’ Marc Peterzell, an attorney for Arnall Golden Gregory in Atlanta, said Monday.
The Georgia Hospital Association, in a May 2 memo to hospital CEOs, obtained by GHN, said that hospitals say their burden in responding to the Phoebe Putney subpoenas “is unreasonable and will be time consuming and costly.’’
The Phoebe Putney subpoenas were the latest tactic in a two-year-old court battle with the FTC over the local hospital authority’s 2011 acquisition of Palmyra Medical Center.
The federal agency, which has opposed the Albany consolidation as anti-competitive, recently won a favorable ruling in the case from the U.S. Supreme Court. The justices unanimously set aside two previous court decisions upholding the Phoebe-Palmyra merger and ruled that the legal challenges to it can continue.
The same May 2 GHA memo includes a copy of a Phoebe Putney attorney’s email that says it would reduce its request for hospitals’ financial documents from 2010 onward instead of 2006. Other changes recounted by Phoebe attorney Tommy Chambless in his email include deleting requests for information about hospitals’ insurance contracts and services provided, demanded in the longer of the two forms of subpoenas sent by Phoebe.
The email from Chambless to a GHA official continued, “The incredible and unreasonable timeline imposed upon us by the Federal Trade Commission gave our attorneys no choice but to throw the broad net out . . . We are not happy bringing problems to our friends, and we want to continue to work toward [a] resolution everyone can live with.”
Chambless, in the email to GHA attorney Temple Sellers, also said that any confidential information requested would not be viewed by Phoebe officials, but only by the outside legal team and consultants working for the hospital system.
“Understand Phoebe will never see documents and data that is hospital specific and submitted as confidential and under seal. Only outside counsel and consultants will see that information, not us.’’
The May 2 memo from GHA’s president, Joe Parker, said the association’s board has requested that Phoebe Putney reduce its document request still further, by, among other things, withdrawing the subpoenas sent to small rural “critical access” hospitals and to hospitals outside Phoebe’s service area “if statewide information is not required.”
GHA also asks for an agreement “to pay the reasonable costs for hospitals to produce the requested documents’’ and an extension of the deadline to deliver the documents, now set at May 21.
Health care experts say Phoebe Putney’s strategy in issuing the subpoenas may be to prove that its own market is competitive in terms of pricing of services and access, or to prove that other hospital systems have similar control over their own markets.
Putney Putney acknowledged the breadth of its request in an interview with GHN last week. “We understand it’s going to be a burden to other hospitals,’’ said Phoebe spokesman Rick Smith. “It’s unfortunate that all this information has to be sought.’’
The $195 million deal, which consolidated operations of Phoebe Putney and Palmyra, was completed in December 2011. Phoebe officials have noted that the integration has proceeded to the point where it would be very difficult to unravel.
An administrative trial on the merits of the acquisition is scheduled to begin Aug. 5. The hearing is expected to explore whether the merger has an anti-competitive effect on the Albany marketplace.
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