FTC won’t challenge West Virginia hospital merger

After a string of losses for the Federal Trade Commission on blocking hospital consolidation, the agency voted to drop its administrative complaint against the proposed merger between two West Virginia hospitals.

The move doesn’t come with kind words from FTC towards the two facilities, Cabell Huntington and St. Mary’s Medical Center, which are located three miles apart in Huntington, W.V. The commission’s statement said the state legislature’s passage of a law exempting the merger from antitrust under an approved “cooperative agreement” was the deciding factor in not pursuing a court case.

“This case presents another example of healthcare providers attempting to use state legislation to shield potentially anticompetitive combinations from antitrust enforcement,” the FTC wrote in a statement. “The Commission believes that state cooperative agreement laws such as SB 597 are likely to harm communities through higher healthcare prices and lower healthcare quality.”

The commission went on to say cooperative agreements aren’t advancing the goals of the Affordable Care Act, as their proponents argue, and hinted that it may decide to challenge mergers protected under these deals in other states in the future.

The FTC has lost two high-profile rulings in its efforts to block hospital mergers in the past few months—one in Pennsylvania and one in Illinois.

West Virginia Attorney General Patrick Morrissey, whose office would’ve defended the merger thanks to the cooperative agreement law, felt his would-be opponents made the right call.

“The FTC’s decision spares taxpayers the costs of a protracted litigation,” Morrisey said in a statement. “This merger, as regulated by our assurance and new legislation, will lead to positive results for consumers. We’re grateful for the FTC’s decision as we would have prevailed in court.”

The combined hospitals will offer nearly 700 beds and employ about 5,000 people.