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Phoebe Merger with Palmyra Dealt Setback by Supreme Court

Albany, GA

WFXL Fox 31 News
Fox 31 News Team

Third Update:
In a press conference held Tuesday afternoon, Phoebe Putney Health System President and CEO Joel Wernick along with Phoebe Putney officials gave their thoughts on the ruling.

Wernick said that the ruling in the case will be sent back to the 11th Circuit Court of Appeals in Atlanta.

Wernick adds that the hospital integration between Phoebe and Palmyra has taken place and the sale has already been closed, so had this ruling be issued earlier, it may have put the acquisition in jeopardy.

Phoebe officials say they were optimistic of the case and didn't expect the ruling to happen but will keep doing what they doing

Wernick says that consolidation is happening everywhere due to changes in healthcare law and we'll be seeing more across the country because of the changes.

Right now this does not change plans for Phoebe North campus and still believe the best is yet to come. This ruling did not tell them they couldn't continue integration so they will keep on until told they cant.

Second Update
The Federal Trade Commission released the following statement in response to the U.S. Supreme Court ruling:

"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."

On March 20, 2011, the FTC filed a complaint in federal district court against Phoebe Putney's acquisition of Palmyra, seeking to block the proposed combination of the only two hospitals in Albany.  The Commission alleged that the deal would reduce competition significantly and allow the combined Phoebe/Palmyra to raise prices for general acute-care hospital services charged to commercial health plans, harming patients and local employers and employees.  On June 27, 2011, the U.S. District Court for the Middle District of Georgia, Albany Division, dismissed the FTC's complaint and denied its motion for a preliminary injunction to stop the deal from going forward. 

The FTC appealed the district court decision to the U.S. Court of Appeals for the 11th Circuit, which affirmed the judgment of the district court on December 9, 2011.  On March 23, 2012, the Commission authorized the staff to request that the Solicitor General file a petition for certiorari with the Supreme Court, which subsequently agreed to hear the case.

First Update
Phoebe Putney Health System has released the following statement in response to the U.S. Supreme Court ruling:

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.

Initial Story
The Supreme Court has dealt a setback to a deal between two private companies that left one as the owner of the only two hospitals in a southwestern Georgia city.

The justices ruled unanimously Tuesday that lower courts improperly dismissed complaints that the merger, aided by a public hospital authority, created a monopoly in hospital services in Albany, Ga.

The Federal Trade Commission tried to block the deal by arguing that it violated federal antitrust law.

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.

For the entire opinion from the Supreme Court, click here.

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