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Tuesday, February 19, 2013 - 9:09am

Supreme Court Rules Against Albany Hospital Merger

Updated: 1 year ago.
The U.S. Supreme Court sided with the Federal Trade Commission Tuesday in the fight over a hospital purchase in southwest Georgia. The court ruled unanimously that it violates antitrust laws for the Hospital Authority of Albany-Dougherty County to own both Phoebe Putney Memorial Hospital and Palmyra Medical Center. The authority bought Palmyra in December 2011. (Photo Courtesy of Stephanie Hicks via Flickr.)

The U.S. Supreme Court ruled unanimously Tuesday that a hospital purchase in southwest Georgia violates antitrust laws.

The Hospital Authority of Albany-Dougherty County owns Phoebe Putney Memorial Hospital. In December 2011, it purchased Palmyra Medical Center. But the Federal Trade Commission has been fighting the purchase, saying the resulting monopoly will mean higher prices.

The Supreme Court’s decision overturns lower-court rulings that the authority is exempt from antitrust laws because it’s an arm of government.

Phoebe officials said they are disappointed.

“The law in the 11th Circuit and in our state, our part of the country, and I would say nationwide, really, has been clear. Prior to today, transactions like ours by a hospital authority are viewed by the courts as an action of the state of Georgia and subject to immunity from antitrust and anti-competitive regulation," said Thomas Chambless, Phoebe's senior vice president and general counsel.

Justice Sonia Sotomayor said in her opinion for the court that an exception in antitrust law for actions taken by a state or its agencies — in this case, the hospital authority — did not shield the transaction from federal antitrust concerns.

In a statement, the FTC’s chairman called the ruling a win for consumers.

“Today’s ruling is a big victory for consumers who want to see lower health care costs, and the Court’s opinion will ensure competition in a variety of other industries as well,” said chairman Jon Leibowitz.

The Supreme Court’s decision sends the case back to the lower courts where Chambless said they will keep fighting.

Full statement from Phoebe Putney Health System:
“The Supreme Court has today reversed a lower court decision allowing the Hospital Authority of Albany-Dougherty County, which owns Phoebe Putney Memorial Hospital, to acquire a competing hospital under the state-action doctrine. In effect, the ruling says the State of Georgia has not clearly articulated its intent that hospital authorities are entitled to the same protection from antitrust enforcement as the state enjoys. We are studying the decision closely. We are disappointed because the lower court rulings were clear in the applicability of state action immunity in accordance with long-standing precedent. This does not alter our resolve or the commitment Phoebe has to meeting the growing needs of this community and the region we serve. We are continuing with our planning process to implement needed changes and to allocate resources properly to protect the safety and improve the health and wellness of our community.”

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Material from the Associated Press was used in this report.

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