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FTC: CHS Must Sell 2 Hospitals to Complete HMA Deal

Franklin, Tenn.-based Community Health Systems received major approval from the Federal Trade Commission yesterday to acquire competitor Health Management Associates in Naples, Fla.

FTCHowever, the FTC mandated CHS divest two hospitals to receive full antitrust approval. According to the settlement with the FTC, CHS must sell 281-bed Riverview Regional Medical Center in Gadsden, Ala., and 116-bed Carolina Pines Regional Medical Center in Hartsville, S.C., both of which are owned by Health Management. CHS will also have to sell related hospital assets, including outpatient facilities. The hospitals must be sold to FTC-approved buyers within six months after the government issues the order.

FTC officials said the pending merger would have greatly reduced competition in Gadsden and Hartsville. CHS owns the only other major hospital in the Gadsden area, 346-bed Gadsden Regional Medical Center. In the Hartsville-Florence region, CHS owns Carolinas Hospital System, which includes a 420-bed hospital. Patients would have only had two options: the CHS hospitals, or McLeod Regional Medical Center.

Also under the agreement, CHS must notify the FTC if it intends to acquire any general acute-care hospital in those areas during the next decade.

The ruling is open to public comment through Feb. 21. Despite the FTC's stipulation, CHS can and still expects to finalize the deal by the end of this month.

Health Management shareholders overwhelmingly approved the merger with CHS earlier this month. CHS agreed to acquire Health Management in July for $3.9 billion in cash and the assumption of $3.7 billion of debt. CHS, which will become the largest for-profit hospital operator by hospital count, expects net revenue this year could top $21 billion following the integration of Health Management.

More Articles on CHS and HMA:
HMA Allegedly Paid Millions of Dollars in Kickbacks to More Than 100 Physicians
HMA Shareholders Approve Merger With CHS
CHS Predicts Large Declines in Profitability, Admissions for FY 2013

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