ProMedica and the AHA Look to SCOTUS on Hospital Consolidations and Mergers

ProMedica, in a well-publicized petition to the U.S. Supreme Court, has sought to overturn a 6th Circuit ruling equiring ProMedica to divest St. Luke’s Hospital, a non-profit hospital in Toledo, Ohio. The merger took place nearly five years ago in 2010, but the FTC and Ohio Attorney General sued to dissolve the deal because they considered it anticompetitive, arguing that the merger would allow ProMedica to control 60% of the hospitals in the Toledo area. The 6th Circuit agreed with the FTC on the grounds that the merger would likely result in higher prices for consumers and lead to unintended precedent for future hospital mergers.

ProMedica’s petition argues that this case is “a rare and uniquely apt vehicle for consideration of the [merger law] issues based on a fully-developed record.” Indeed, hospital merger cases are rarely litigated through appeal and this case represents a great opportunity for the Supreme Court to clear up aspects of merger law left after its decision in United States v. General Dynamics Corp., 415 U.S. 486 (1974). ProMedica argues that over the last 40 years confusion has developed over the FTC’s unilateral-effects theory and consolidation pressures have increased with the passage of the Affordable Care Act and other federal regulations. ProMedica has garnered support from the American Hospital Association (“AHA”), which filed an amicus brief in support. AHA believes that the Sixth Circuit errored when it did not apply the General Dynamics weakened competitor analysis to the ProMedica acquisition.

More information on ProMedica merger here.