LCMC Health was told by a judge in Washington, D.C., not to close any of the Louisiana hospitals that it acquired from HCA Healthcare as a legal battle between the Federal Trade Commission and LCMC Health works its way through the courts.
Judge Amy Berman Jackson for the U.S. District Court ordered that all service lines must remain available at the three hospitals — Tulane Medical Center, Tulane Lakeside Hospital and Lakeview Regional Medical Center — and that LCMC can’t terminate or renegotiate contracts with health insurers at the facilities.
The order on April 21 comes as LCMC Health and the FTC file dueling court requests concerning whether state acquisition approval can preempt federal review of LCMC’s $150 million acquisition of the three facilities from HCA Healthcare.
LCMC Health on April 19 filed a lawsuit against the FTC arguing that the agency’s request to halt the acquisition wasn’t valid because LCMC had already gained state approval for the acquisition.
Despite securing a state certificate of public advantage, or COPA, which effectively shields acquisitions from federal antitrust oversight, LCMC alleged that the FTC asked it to observe an acquisition waiting period under the HSR Antitrust Act, in addition to paying a filing fee to the agency for the purchase. The filing fee now includes a penalty fee of $46,517 per day that’s been accruing since Jan. 1, according to the April 19 lawsuit.
“The FTC’s actions constitute a significant violation of federal law and Louisiana’s sovereignty,” plaintiffs argued in the lawsuit. “Left unchecked, this agency overreach would not only offend important principles of federalism, but also harm the people of Louisiana who are well-served by the Acquisition — as Louisiana itself concluded when it issued a COPA to approve the transaction.”
In response, the FTC on April 20 filed a petition for a temporary restraining order and preliminary injunction to half the LCMC and HCA acquisitions, arguing that the entities should have notified the agency of the acquisition and must observe HSR filing requirements.
“LCMC and HCA flouted their HSR Act obligations by failing to report their transaction and then consummating it, without filing the required premerger notification and without a cognizable justification or exemption,” the lawsuit states, arguing that the state-issued COPA has never been recognized as an exemption from the HSR notification requirements “by any court in the HSR Act’s forty-seven year history.”