Phoebe Putney, FTC could reach settlement

Print Friendly and PDF By: Andy Miller Published: Jun 28, 2013

The Federal Trade Commission and Phoebe Putney Health System may be heading toward a settlement in their two-year antitrust battle.

The federal agency has fought the merger of Phoebe Putney Hospital and its only competitor in the Albany area, Palmyra Medical Center, since the deal was announced.

Two initial court rulings upheld the merger. But in February, the FTC won a big victory in the U.S. Supreme Court. The justices unanimously set aside the previous decisions and ruled that the legal challenges could continue. That dimmed the outlook for the merger and raised the likelihood of a protracted fight.

On June 11, an administrative law judge granted a joint motion by the two sides to withdraw their legal dispute for 30 days to study a proposed agreement, which has been sealed.

“A reasonable possibility of settlement exists in this matter,’’ the judge, D. Michael Chappell, said in his order, which was reported this week by media in the Albany area.

Both the FTC and Phoebe officials declined comment.

The judge’s order comes after a temporary restraining order and preliminary injunction stopped the integration of Phoebe Putney’s operations with those of Palmyra, now known as Phoebe North. The acquisition of the former HCA hospital was made by the local hospital authority.

The FTC has argued from the start that allowing Phoebe to operate the only two hospitals in Albany is anti-competitive. Phoebe officials say the sale, completed in 2011, has not led to any price increases, and they argue that FTC opposition is slowing down plans to develop a women’s and children’s center.

Kevin Grady, adjunct professor of law at the University of Georgia, said in an interview with the Albany Herald this week that if the FTC is still trying to restore the competitive status quo, a settlement could involve bringing in a third party to take over the operations of the former Palmyra.

Phoebe Putney’s legal team rattled the industry statewide recently by sending subpoenas to all non-specialty hospitals in Georgia, asking for financial and other information as it pursued its fight with the FTC.

The subpoenas sparked concerns about legal work and costs for hospitals in meeting that request. Facing protests from the Georgia Hospital Association, the Phoebe legal team subsequently pared back the document load for hospitals.

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