Another regulatory twist has emerged in the FTC vs. Phoebe Putney saga.
Phoebe and its local Albany hospital authority said Thursday that they have appealed a state agency’s ruling that a certificate-of-need (CON) approval would not be necessary if they were ordered to sell a hospital they acquired in 2011.
The acquisition of Palmyra Medical Center, which had been Phoebe’s only competitor in the Albany region, drew vigorous opposition from the Federal Trade Commission, which sued to stop the deal.
The FTC and Phoebe Putney reached a preliminary agreement last year to settle the lawsuit. The federal agency had been waiting for the Georgia Department of Community Health’s decision on the CON matter before it decided whether to finalize the settlement deal.
The state’s CON laws are a complex regulatory apparatus that governs the construction and expansion of health care facilities in the state.
The FTC said in March that it had tentatively agreed to settle because it believed that even if it won the suit, Georgia’s CON laws would prevent the decoupling of the merged Albany hospitals.
But Community Health recently determined that such is not the case. It said no CON review would be needed if a divestiture of Palmyra were to be ordered.
Phoebe and the Hospital Authority of Albany-Dougherty County said Thursday that they are requesting an administrative appeal, which includes an evidentiary hearing to contest the determination on the need for a CON review.
“We strongly believe DCH’s determination was incorrect on the facts and the law, and contrary to the plain statutory language, DCH’s own rules and testimony, and prior Georgia Supreme Court decisions,’’ a Phoebe Putney spokeswoman said in a statement.
She continued, “We are resolute on the correctness of our legal position and on the rightness of Phoebe’s plan for the future well-being of this community. Meanwhile, we will continue to do that which we do best: Look after the people of Southwest Georgia who need care.”
A Community Health spokeswoman Thursday declined comment on the Phoebe appeal.
The FTC challenged the merger of Phoebe Putney with Palmyra because it gave one entity control of the only two hospitals in Albany. The federal agency argued that such an arrangement would be anti-competitive and harm health care consumers in the city and the southwest Georgia region.
The long-running legal battle over the Palmyra acquisition included a U.S. Supreme Court defeat for Phoebe, though that did not resolve the case.