11th Circuit Holds Hospital Merger Under Direction of Public Hospital Authority Immune from Antitrust Scrutiny - December 20, 2011

The 11th Circuit Court of Appeals held that a hospital merger was immune from antitrust scrutiny because the Georgia hospital authority that owns assets of the acquiring hospital was acting under powers granted by the state. The Hospital Authority of Albany-Dougherty County, which owns the assets of Phoebe Putney Memorial Hospital, planned to acquire the assets of Palmyra Park Hospital, owned by HCA, Inc. In a broad ruling, the Court found that the state action doctrine, which immunizes anticompetitive behavior authorized by state legislatures, applied in this case because Georgia law grants hospital authorities the power to acquire or lease hospitals – actions the legislature must have anticipated would produce anticompetitive effects. The Georgia law at issue is similar to laws across the country creating hospital authorities. While this decision is only effective in the 11th Circuit and is in the context of a hospital merger, it could serve as a favorable precedent to NAPH members with similar state-enabling statutes. The decision, FTC v. Phoebe Putney Health System Inc., is available at http://www.ca11.uscourts.gov/opinions/ops/201112906.pdf.