Dive Brief:
- The Federal Trade Commission is making a rare stand in continuing to try to block the merger of Pennsylvania hospitals Penn State Hershey Medical Center and PinnacleHealth System after an unexpected loss in federal court this week, Modern Healthcare reported.
- Normally the FTC drops hospital merger challenges if it doesn't win an initial preliminary court injunction to temporarily block such a transaction.
- In this case, the FTC has decided to appeal the decision of a federal judge who denied the FTC's request for a preliminary injunction.
Dive Insight:
Both moves by the federal judge and the FTC represent striking breaks from the status quo as the matter of healthcare mergers becomes increasingly highly charged.
The federal judge's decision this week not to grant the FTC's request was an unusual move after the FTC's string of blocked mergers during recent years.
In deciding for the hospitals, U.S. District Judge John Jones III this week said the FTC failed to acknowledge the pressures of the changing healthcare environment, including the ACA, fluctuations in Medicare and Medicare reimbursement and risk-based contracting.
“We find it no small irony that the same federal government under which the FTC operates has created a climate that virtually compels institutions to seek alliances such as the hospitals intend here,” Jones wrote.
Now, the FTC's decision to continue fighting this merger after a loss at the preliminary injunction stage is the first such move in at least 20 years, Modern Healthcare reported.
The FTC contends U.S. District Judge John Jones III made some mistakes in weighing the request, including an improper methodology for defining the hospitals' geographic market. In addition, the agency may be considering more may be at stake with this decision if the case serves to set a precedent that could impact other hospital merger decisions.