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CTY lukes20pp ProMedica and the Federal Trade Commission are getting ready to duke it out in the federal 6th Circuit Court of Appeals over whether the Toledo-based health-care network must divest itself of St. Luke's Hospital in Maumee. Both sides are preparing legal briefs to submit throughout the fall and expect to conduct oral arguments in 2013. ProMedica filed an appeal with the court in May.
ProMedica and the Federal Trade Commission are getting ready to duke it out in the federal 6th Circuit Court of Appeals over whether the Toledo-based health-care network must divest itself of St. Luke's Hospital in Maumee. Both sides are preparing legal briefs to submit throughout the fall and expect to conduct oral arguments in 2013. ProMedica filed an appeal with the court in May.
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Published: Wednesday, 7/25/2012 - Updated: 1 year ago

ProMedica, FTC gear up for next legal battle

St. Luke's-merger ruling going to appeals court

BY KRIS TURNER
BLADE BUSINESS WRITER

ProMedica and the Federal Trade Commission are getting ready to duke it out in the federal 6th Circuit Court of Appeals over whether the Toledo-based health-care network must divest itself of St. Luke's Hospital in Maumee.

Both sides are preparing legal briefs to submit throughout the fall and expect to conduct oral arguments in 2013. ProMedica filed an appeal with the court in May.

In a 4-0 ruling March 22, the FTC said it would be illegal and anti-competitive for ProMedica to merge with St. Luke's.

Officials at the health-care provider and the hospital vehemently oppose the ruling and say it would hurt St. Luke's financially if the two split.

"What we're engaged in is the process of preparing our brief," said Jeffrey Kuhn, ProMedica chief legal officer.

"For the next couple of months, it's going to be filing these briefs with the court, and at some point I'm thinking an oral argument will be set."

ProMedica's initial brief is due Sept. 17, and it can file a rebuttal brief by Nov. 30. The deadline for the FTC's brief is Nov. 7.

Mr. Kuhn couldn't discuss specifics of ProMedica's legal strategy but said it would be based upon the concern that the FTC didn't fully examine the multitude of benefits to patients and the community that come from its partnership with St. Luke's.

St. Luke's president, Dan Wakeman, said some of those benefits include allowing the hospital to staff its emergency room with ProMedica nurses, buy new equipment, and complete upgrades to an electronic system for medical records.

"As an independent community hospital, we had limited capital reserves that were being stressed," Mr. Wakeman said.

St. Luke's lost more than $2,000 from Medical Mutual of Ohio and $1,800 from Anthem Blue Cross and Blue Shield on each inpatient in 2009 because it was unable to renegotiate contracts with the insurance providers in previous years.

The FTC's case is based on facts and should stand on appeal, said Alexis Gilman, deputy assistant director of the mergers IV division of the FTC.

"Ultimately we think the facts and the law continue to be on our side," Mr. Gilman said. "We think the commission's opinion squarely addresses ProMedica's arguments. They have a tough case to make before the Sixth Circuit."

It's a tossup whether ProMedica will prevail or if the court will side with the trade commission, said Dan Crane, a professor of law at the University of Michigan. The court has sided with the FTC and ruled against their opponents in recent years, he said.

"My sense is it's batting roughly 50/50 right now," Mr. Crane said.

Contact Kris Turner at: kturner@theblade.com or 419-724-6103.



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