Dive Brief:
- Hackensack Meridian Health, the largest health system in New Jersey, is appealing its case after a federal judge in the state ruled against the system by issuing a preliminary injunction to stop its acquisition of a close competitor, Englewood Health, according to a filing with the 3rd Circuit Court of Appeals.
- The injunction from the lower court was issued on Aug. 4, which halts the consummation of the merger until the Federal Trade Commission’s administrative proceedings are complete.
- The FTC’s own administrative trial is set to begin on Oct. 12, according to the regulator.
Dive Insight:
The FTC alleges the deal is harmful to consumers because it would reduce competition and quality while making care more costly for patients.
If they were to combine, Hackensack would control three of the six acute care hospitals in Bergen County, New Jersey, leaving insurers with few other options.
“Hackensack Meridian Health would be able to demand higher rates from insurers for the combined entity’s services, which, in turn, may lead to higher insurance premiums, co-pays, deductibles, or other out-of-pocket costs for plan members,” the FTC said previously when it first announced its plans to block the deal last year.
After a seven-day evidentiary hearing this summer that garnered testimony from economists, insurance and hospital executives, New Jersey Judge John Michael Vazquez ruled in favor of the FTC and granted the regulator an injunction to temporarily block the deal.
The ruling comes as healthcare mergers and acquisitions continue at a steady clip. The FTC admits it is overwhelmed by a “tidal wave” of merger filings this year. The agency warned that while it may take longer to go through the filings, companies that complete deals risk having to unwind them later.
“Companies that choose to proceed with transactions that have not been fully investigated are doing so at their own risk,” the regulator said in letter to companies, warning them in advance.
Also this summer, President Joe Biden issued an executive order that calls for more rigorous scrutiny of hospital mergers. Hospital lobby the American Hospital Association pushed back, arguing hospitals already face strict scrutiny and advising the administration to focus on the insurance sector instead.