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Regulators: St. Luke's is violating court order by not unwinding Saltzer deal

The Federal Trade Commission and the Idaho Attorney General's Office have filed court documents claiming Boise, Idaho-based St. Luke's Health System is not complying with an order requiring it to unwind its acquisition of Saltzer Medical Group in Nampa, Idaho, according to an Idaho Statesman report.

St. Luke's 2012 acquisition of the medical group was challenged by the FTC, and in January 2014, a federal judge ordered St. Luke's to reverse its acquisition of Saltzer. Two of St. Luke's competitors, Saint Alphonsus Health System and Treasure Valley Hospital, both in Boise, and the Idaho attorney general were also plaintiffs in the case. In February, the Ninth Circuit Court of Appeals upheld the federal judge's ruling.

However, it appears St. Luke's isn't complying with the court order, as the FTC and the Idaho Attorney General's Office said they are being told that St. Luke's will "divest only a fraction of the original Saltzer practice," according to the report.

"We have been provided limited information…and have heard rumors and hearsay about Saltzer's current and contemplated future status," wrote the FTC and the attorney general's office in a recent court filing. "What we have been told, however, is disturbing."

The issue of separating services appears to be keeping the deal from being reversed.

"We were ordered to divest completely," St. Luke's general counsel Christy Neuhoff told the Idaho Statesman. However, Saltzer was "not ordered to take everything back." Therefore, there is confusion as to what to do with the services Saltzer is no longer interested in.

"It's one thing to say these two parties cannot be one going forward, but it's another for either a court or a government agency to actually dictate how a private entity runs its business going forward," Ms. Neuhoff told the Idaho Statesman.

The FTC and the Idaho Attorney General's Office claim both St. Luke's and Saltzer are not being cooperative in providing information about their plans, their staffing and their finances. Ms. Neuhoff claims it is only Saltzer that is not cooperating. Saltzer President John Kaiser, MD, told the Idaho Statesman "Saltzer has been working on its divesture plan for over a year." However, he did not provide any details about the plan.

More articles on healthcare industry transactions:

Mid-year report: 9 called-off hospital, health system deals in 2015
Healthcare deals down year-over-year in May
Experts weigh in on proposed Northwestern, KishHealth affiliation



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