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Federal regulators are challenging Louisiana Children’s Medical Center’s (LCMC) integration of three HCA Healthcare hospitals, arguing that officials behind the $150 million acquisition failed to comply with antitrust reporting requirements.
Late last week, the Federal Trade Commission (FTC) asked the US District Court for the District of Columbia to temporarily halt the integration while the court decides whether LCMC and HCA Healthcare (HCA) violated premerger notification rules established under the Hart-Scott-Rodino (HSR) Act. The agency further sought to require LCMC and HCA to comply with that law.
FTC Chair Lina Khan said the actions aim to “hold LCMC accountable for disregarding the law by ignoring filing requirements and prematurely consummating their deal.”
“Businesses that believe they can flout the law should be on notice: we will use the full scope of our authority to combat obstruction and to vindicate the FTC’s authority to investigate potentially illegal deals,” she said in a statement.
LCMC, in turn, sued the FTC, Justice Department, and US Attorney General Merrick Garland, in US District Court for the Eastern District of Louisiana, arguing that the acquisition is “indisputably immune from the federal antitrust laws” since it was approved by the state of Louisiana. The New Orleans-based nonprofit asked the court, among other things, for a judgment declaring that it and HCA are not subject to the notification requirement or antitrust penalties.
At issue is LCMC’s acquisition of three New Orleans-area hospitals—Tulane Medical Center, Lakeview Hospital, and Lakeside Hospital—from HCA, a Tennessee-based operator of healthcare facilities across the US and UK.
FTC officials argued that the size of the early January deal required that it be reported to federal antitrust agencies. But LCMC contended that the HSR Act’s notification and waiting period requirements don’t apply because the Louisiana legislature and attorney general approved the acquisition.
Louisiana Attorney General Jeff Landry accused the federal government of “trying to impose its will on an agreement that received tremendous support from the community.”
“I will explore all of our State’s legal options to fight this federal overreach,” he said in a statement.
LCMC and HCA did not immediately respond to requests for comment on the litigation.
LCMC told Becker’s that the state’s certificate of public advantage process—which is used to approve hospital mergers—“was rigorous and transparent, with active supervision to ensure consumer protection.”