FTC dismisses complaint challenging West Virginia hospital merger

The Federal Trade Commission is dismissing its administrative complaint challenging the proposed merger between Cabell Huntington (W.Va.) Hospital and Huntington-based St. Mary's Medical Center.

Cabell Huntington and St. Mary's began merger talks in 2014, and the FTC authorized action to block the deal last November, alleging the deal violated antitrust law.

To get around the FTC's challenge, West Virginia lawmakers proposed legislation allowing certain hospital deals approved by the West Virginia Health Care Authority and the state's attorney general to avoid state and federal antitrust laws. West Virginia Gov. Earl Ray Tomblin signed the legislation into law in March.

In light of the new West Virginia law, the FTC voted unanimously to dismiss its administrative complaint.

"This case presents another example of healthcare providers attempting to use state legislation to shield potentially anticompetitive combinations from antitrust enforcement," the commission wrote in a statement.

The FTC said its decision to dismiss its complaint challenging the Cabell Huntington-St. Mary's merger does not indicate it will take the same approach in future cases. "We will continue to vigorously investigate and, where appropriate, challenge anticompetitive mergers in the courts and, if necessary, through state cooperative agreement processes."

Kevin Fowler, president and CEO of Cabell Huntington, and D. Monte Ward, the hospital's senior vice president, CFO and chief acquisition officer, were pleased with the FTC's decision.

"This paves the way for two strong hospital systems to join together to improve the quality of healthcare and the scope of services for the region we serve in prudent and cost efficient ways," they said in a statement. "We are confident that healthcare consumers will be the ultimate beneficiaries of this transaction."

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