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New Jersey hospitals take rare step in merger fight with FTC

Edison, N.J.-based Hackensack Meridian Health and Englewood (N.J.) Health are taking their case to the appellate court after their proposed merger was temporarily halted amid a challenge from the Federal Trade Commission. An appeal is a rare step at this stage of an FTC action, according to Law360

Hackensack Meridian and Englewood Health filed the appeal Aug. 26, less than a month after a New Jersey federal court granted the FTC's request for a preliminary injunction against the transaction. The court's decision permitted the FTC to pursue an administrative case against the deal. 

An appeal at this stage of the action is rare because most organizations terminate their plans to combine amid a challenge from the FTC, according to Law360

In an Aug. 26 court filing, Hackensack Meridian and Englewood Health identified the following three questions they would like the U.S. Court of Appeals for the 3rd Circuit to resolve: 

1. Did the district court act contrary to appellate court precedent, basic economics and federal horizontal merger guidelines by allowing the FTC to define the relevant geographic market for assessing competitive effects according to where patients live, instead of the location of hospitals, when it is undisputed that hospitals can't discriminate in their pricing to insurers based on where patients live? 

2. Did the district court incorrectly determine that the FTC could establish a likely price increase above competitive levels by relying on a study of changes in patients' willingness to pay following mergers in other states? 

3. Did the district court apply the wrong legal standard to its evaluation of the pro-competitive benefits and efficiencies put forth by the hospitals? 

Hackensack Meridian and Englewood Health signed a definitive agreement to merge in October 2019. The FTC claims the proposed deal would eliminate close competition between the two healthcare providers, and the merged system would control half of the acute care hospitals in Bergen County, N.J. 

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