Louisiana system beats FTC's challenge over 3-hospital acquisition

A New Orleans federal judge has ruled that LCMC Health sought the correct state approvals for its $150 million acquisition of three Tulane University hospitals from Nashville, Tenn.-based HCA Healthcare in January, according to nola.com.

The issue in the antitrust case was whether or not LCMC should have sought federal approval before finalizing its purchase of the hospitals — New Orleans-based Tulane Medical Center; Covington, La.-based Lakeview Regional Medical Center; and Metairie, La.-based Tulane Lakeside Hospital.

The Federal Trade Commission had ordered the health system to halt the acquisition while it conducted a review, but the Louisiana legislature and state attorney general had "expressly and unequivocally authorized" the deal to go through, according to court documents obtained by Becker's.

Louisiana is one of about 20 states that gives the state the authority to greenlight hospital mergers under the certificate of public advantage process, according to nola.com. Because of this, LCMC argued in court documents that the acquisition is "indisputably immune" from federal antitrust laws.

Since Louisiana law gives regulatory oversight of hospital consolidations to the office of the state attorney general — which approved the Tulane hospital transaction in December — LCMC did not need to also submit to a review by the FTC, U.S. District Judge Lance Africk ruled.

"We are pleased to announce that the district court has recognized the value of our partnership with Tulane University and upheld the State of Louisiana's approval," LCMC CEO Greg Feirn said in a statement provided to Becker's. "Earlier this year, LCMC Health and the Attorney General Jeff Landry took a strong stance by taking legal action to safeguard this significant collaboration. This partnership underwent a thorough review and approval from the Louisiana Department of Justice, which has been validated by the court's decision."

The ruling allows LCMC to proceed with its plan to close Tulane Medical Center and repurpose it into a mixed-use facility with a freestanding emergency room, training programs and student housing, according to nola.com. LCMC also will relocate 500 physicians and residents from Tulane Medical Center to East Jefferson General in Metairie and University Medical Center in New Orleans, both of which are operated by the health system.

The lawsuit drew national attention because of its potential implications for hospital transactions across the country at a time when the FTC is taking a harder look at healthcare consolidation and is pushing for more thorough reviews of mergers and acquisitions. 

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