FTC extends delay in adjudication of Phoebe North case

ALBANY — The Federal Trade Commission has again extended its withdrawal of adjudication of its case with the Hospital Authority of Albany-Dougherty County’s acquisition of Phoebe North, formerly Palmyra Medical Center.

The deadline for the previous extension was midnight Friday. On Thursday, the FTC extended the withdrawal order until 11:50 p.m. March 31.

“To facilitate further consideration of the consent proposal, the commission has decided to extend the withdrawal of this matter from adjudication,” the order states on the FTC website.

On Jan. 28, several months after a proposed settlement was rejected by the FTC regarding the Hospital Authority’s purchase of the former private hospital, the case was pulled from administrative review through the end of February for the purpose of considering the consent proposal. That also stated that the consent proposal would not be placed on public record unless and until it is accepted by the agency.

A spokeswoman from the FTC said the agency would have no comment on the matter. Officials from Phoebe Putney Memorial Hospital also have declined to comment.

The case concerns the December 2010 merger that brought Palmyra, then a privately-owned rival to Phoebe, under the ownership of the Hospital Authority, raising concerns from the FTC that the $195 million purchase violated antitrust laws and greatly diminished competition in the Southwest Georgia health care marketplace.

Officials with the FTC announced in September that it — in a 3-0 vote, with Commissioners Joshua D. Wright and Terrell McSweeny abstaining —was rejecting a settlement the agency developed a year earlier, placing the matter back in administrative court. The matter was due to go back into proceedings this month. McSweeny and Wright also did not participate in Thursday’s March extension.

The FTC, in its 2011 complaint against the purchase of Palmyra from Hospital Corporation of America by the Hospital Authority, argued the acquisition would reduce competition for acute-care hospital services sold to commercial health plans in the six-county area that comprises metro Albany — Dougherty, Lee, Worth, Baker, Terrell and Mitchell counties. The commission argued the lessened competition would give Phoebe, which was chosen by the Authority to operate Phoebe North, an 85 percent market share and would, the FTC contended, cause health costs to rise, harming patients and employers.

The Hospital Authority and Phoebe had argued the transaction was exempt from federal antitrust oversight under the state action doctrine, a position that was upheld in U.S. District Court and the 11th U.S. Circuit Court of Appeals, but rejected in February 2013 by the U.S. Supreme Court.

Citing Georgia’s Certificate of Need law, the FTC in August 2013 had proposed a settlement that would have allowed the Authority to retain ownership of Phoebe North and also would have allowed Phoebe Putney Memorial Hospital to operate the facility. FTC officials said the CON law made a structural remedy to the acquisition impossible. During the comment period on the proposed agreement, however, FTC officials said input from the public and “other information” led them to believe the Georgia CON law did not preclude a structural solution, resulting in the commissioners’ vote to withdraw acceptance of the proposed consent agreement and return to administrative litigation.

North Albany Medical Center LLC, which is an out-of-state business that registered with the Georgia Secretary of State’s Office in December 2013, impacted the FTC’s decision to reject the settlement. In early June, the Georgia Department of Community Health staff issued an initial determination that said returning Phoebe North to its previous status as a separately licensed hospital for divestiture would not require prior review and approval by the Department of Community Health, a position that Phoebe and the Hospital Authority appealed. A state administrative hearing officer later reversed the finding, saying the state laws would apply in the event of a divestiture.