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4 healthcare deals questioned by feds in 2021

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Several potential hospital mergers have been issued a second request for information or were challenged by the Federal Trade Commission or Justice Department this year.

Here is a breakdown of four of them:

Editor's note: This is not an exhaustive list. 

Beaumont Health, Spectrum Health

The FTC has requested additional information from Southfield, Mich.-based Beaumont Health and Grand Rapids, Mich.-based Spectrum Health, which is seeking approval to combine into a 22-hospital system with 64,000 team members.

The two health systems signed a letter of intent in June and inked a formal agreement in September to merge and create a new health system to temporarily be called BHSH System. Beaumont and Spectrum said Sept. 24 that the FTC is experiencing a surge in merger filings across all industries, so it will take longer than originally anticipated to review their proposed merger. 

Hackensack Meridian Health, Englewood Health

The FTC asked a federal judge in May to stop Edison, N.J.-based Hackensack Meridian Health's acquisition of Englewood (N.J.) Health. A New Jersey federal court on Aug. 4 granted the FTC's bid to block the planned merger. The two health systems on Aug. 26 filed an appeal after the merger was temporarily halted by the federal court.

The FTC argued in its case that it believes the deal would unlawfully restrict competition in one of New Jersey's most populated counties. The FTC said it can prove the two entities "vigorously compete against each other." The FTC further said in its antitrust challenge that the two organizations would reduce competition in Bergen County, N.J., as they would own half of the six acute care hospitals in the county. 

Lifespan, Care New England

Despite tough scrutiny from state and federal regulators, the merger between two Providence, R.I.-based health systems — Lifespan and Care New England — is on track. The two organizations on April 26 filed a merger application with the Rhode Island health department and attorney general's office. The formal filing came after the two systems inked a definitive agreement to merge in February and filed their application for antitrust review with the FTC. 

On Oct. 1, Lifespan and Care New England said they would submit revised merger applications to the FTC, attorney general's office and the state health department. The revised documents address some follow-up questions.

The organizations said the merger application was completed and will go under review by the state attorney general's office and the Rhode Island Department of Health on Nov. 17. The deal will need the FTC's approval as well. 

UnitedHealth's Optum, Change Healthcare

The Justice Department said in March it will take a closer look at UnitedHealth Group's proposed acquisition of Change Healthcare, according to a Securities and Exchange Commission filing. Officials from the Justice Department asked both companies for more information about the transaction. The request gives the agency more time to review the deal. 

The parties in November entered into an amended timing agreement with the Justice Department, under which the companies agreed not to consummate their deal before Feb. 22, 2022.

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