FTC rules ProMedica must divest itself of St. Luke’s Hospital
3/28/2012The Federal Trade Commission has ruled ProMedica must divest St. Luke’s Hospital to a government-approved acquirer within six months.
The commission voted 4-0, ruling that ProMedica’s August, 2010, joinder with St. Luke’s is anticompetitive and likely to increase hospital prices.
ProMedica plans to appeal the case to the 6th Circuit Court of Appeals in Cincinnati, according to a ProMedica spokesman. Until the case is settled, St. Luke’s remains a part of ProMedica.
The ruling issued last Thursday was made public Wednesday.
FTC attorneys early last year had requested a monitor over the hold-separate agreement as part of a preliminary injunction filed in U.S. District Court in Toledo. The preliminary injunction was granted last March by Judge David Katz, who ordered ProMedica to abide by the hold-separate agreement with the FTC but didn't appoint a monitor.
An appeal hearing was held in February before the commission on FTC Chief Administrative Law Judge D. Michael Chappell's decision that the Maumee hospital's 2010 accord with ProMedica is anti-competitive and illegal. Judge Chappell ruled ProMedica must divest St. Luke's to an FTC-approved buyer, saying the partners could charge "supracompetitive" reimbursement rates to insurers for general acute-care in-patient hospital services and cause higher health-care costs.
Each side had 30 minutes to present its case to the commission, including time for answering questions. The commission's final decision maintained that ProMedica must divest St. Luke's.
ProMedica has maintained the partners could not raise hospital prices to anti-competitive levels and are committed to appealing unfavorable decisions.
St. Luke's remains part of ProMedica as the appeals process continues. As part of the hold-separate agreement with the FTC, ProMedica cannot reduce staffing or clinical services at St. Luke's.