https://mailchi.mp/c02a553c7cf6/the-weekly-gist-july-28-2023?e=d1e747d2d8

Last week the Department of Justice (DOJ) and the Federal Trade Commission (FTC) proposed thirteen new merger guidelines that, if finalized, would provide federal regulators greater ability to scrutinize mergers across all industries, including healthcare.

The guidelines expand which mergers could be potentially illegal and therefore worth probing, including those with lower monetary value and those in which the newly combined organization would control 30 percent or greater market share, and  would increase scrutiny on transactions that are part of a series of multiple acquisitions by an organization. They also seek to limit the ability of an organization to justify an acquisition on the grounds that the weaker party in the deal would be unable to continue to operate. Comments on the guidelines are being accepted until September 18.

The Gist: To date, federal regulators have struggled to prevent non-traditional mergers between companies that provide different services, operate in different markets, or are below the monetary threshold for review. 

The proposed guidelines would significantly increase FTC and DOJ scrutiny at all levels of hospital mergers, and also jeopardize physician and other care asset acquisitions by health systems, payers, and private equity-backed organizations. They are the latest from the Biden Administration in a recent, multi-part push to reduce consolidation through greater antitrust enforcement. 

This effort includes last month’s proposal to add additional reporting requirements for mergers outlined in the Hart-Scott-Rodino Act, as well as the FTC’s move earlier this month to withdraw two antitrust policy statements focused on healthcare markets that both agencies say are now “outdated.” Those now-rescinded statements provided guidance on antitrust safety zones, including for accountable care organizations participating in the Medicare Shared Savings Program and for mergers between two hospitals in which one is much smaller.