Health Law Highlights

“Wheels Fall Off” FTC’s Latest Hospital Merger Challenge

Summary of article from Holland & Knight LLP, by Bill Katz, David Kully, Krithika Rajkumar:

The Judge in FTC v. Community Health Systems Inc. & Novant Health Inc., denied the FTC’s motion to block Novant Health’s $320 million acquisition of two hospitals, marking a rare loss for the FTC in hospital merger challenges. The ruling revitalized the “failing firm” defense, suggesting that the assets in question would cease to be competitive without the merger, despite not meeting the stringent criteria outlined in the Merger Guidelines. The court acknowledged potential harm to competition but emphasized that the acquisition would likely enhance investment and competition in the Charlotte area. The FTC has appealed the decision, with the application of the failing firm defense expected to be a key issue. This case may influence future hospital mergers involving financially distressed entities.