The Source Blog

No Decision in AAEM-PG v. Envision Case: A Potential Precedent-Setting Corporate Practice of Medicine and Private Equity Case is Avoided  A decision in the long-anticipated case, the American Academy of Emergency Medicine Physician Group (AAEM-PG) v. Envision Healthcare, will not come to pass, as Envision, a private equity-backed emergency physician staffing company, choose to exit the California market.  In a press release, AAEM-PG stated a concern about whether a California court could retain jurisdiction over the case after Envision exited, and noted that a confidential settlement had been made.   Experts, …

Healthcare Competition and Consolidation Medicare Advantage and Consolidation’s New Frontier — The Danger of UnitedHealthcare for All (New England Journal of Medicine) Hayden Rooke-Ley, Soleil Shah, and Erin C. Fuse Brown This article describes the recent ransomware attack on Change Healthcare and the ownership structure of UnitedHealth Group, including how much market power it has with medical claims, data analytics, insurance, physicians, PBMs, pharmacies and a bank.  The authors note the risks involved in these types of conglomerations, including market abuses that raise costs, erode quality of care, and harm …

The convoluted journey of the FTC’s attempt to ban noncompete agreements has taken another turn.  On July 23, a Federal District Court Judge reversed a ruling from a lower Federal Court in Texas that had temporarily blocked the FTC from enforcing the rule, pending ongoing litigation.  The most recent ruling states that the FTC has the power to ban anticompetitive practices, including noncompete agreements.  The ruling also states that the plaintiff had not shown that it would suffer irreparable harm from the rule if it were allowed to go into …

In late June Novant announced it would abandon attempts to buy two Community Health Systems (CHS) hospitals in North Carolina.  This announcement followed a preliminary ruling in Federal District Court for Novant and a subsequent appellate court ruling for the Federal Trade Commission (FTC). Regardless of the final outcome of the merger, the preliminary Novant win is significant because it represents a successful use of the often cited, rarely successful, “failing firm” defense – which parties can potentially use to push through a merger that would otherwise create an unacceptable …

On Wednesday, July 3, 2024, a Texas Federal Court issued a preliminary injunction against the FTC’s noncompete ban in the case brought by Ryan LLC and the U.S. Chamber of Commerce, preventing the rule from taking effect on September 4.  The decision, made by U.S. District Judge Ada Brown, stated that the plaintiffs were likely to succeed on the merits that the FTC lacks authority to promulgate the rule, which the Judge called “arbitrary and capricious”, and that that blocking the rule temporarily is in the public interest.  Although the …

On a 6-3 decision following party lines, the conservative majority of the U.S. Supreme Court overturned a long-standing legal precedent that required courts to generally defer to regulations issued by Federal agencies that interpret and enact Congressional statutes, commonly referred to as Chevron deference.  Chevron deference required courts to defer to an agency’s “reasonable interpretations” of ambiguous statutes passed by Congress. The end of the precedent opens the doors to legal challenges of existing Federal administrative law, and will likely weaken the ability of Federal agencies to issue administrative regulations …

On May 16, 2024, a Federal District Court Judge dismissed a case filed in 2022 by the Oregon Association of Hospitals and Health Systems (OAHHS, the trade group representing hospitals in Oregon) against the State of Oregon and the Oregon Health Authority (OHA).  The suit challenged the law created by Oregon HB 2362, 2021 legislation that required health care entities that meet minimum thresholds to obtain state approval before any mergers or acquisitions.  The new law created the Health Care Market Oversight (HCMO) program, housed within the Oregon Health Authority …

On Tuesday, June 4, 2024, the 9th U.S. Circuit Court of Appeals overturned Sutter Health’s win in a $411 million antitrust suit, saying that the jury that found in favor of Sutter in 2022 was given improper jury instructions, and that the plaintiffs were improperly prevented from presenting relevant evidence. In September 2012, a class of individuals and employers who purchased fully insured plans from the five largest commercial health insurance companies in California filed this lawsuit alleging that Sutter Health restricted competition in the healthcare market using anticompetitive tactics. A similar lawsuit, …

JULY 8 UPDATE: On July 3, 2024, a Texas Federal Court issued a preliminary injunction against the FTC’s noncompete ban in the case brought by Ryan and the U.S. Chamber of Commerce, preventing the rule from taking effect on September 4. JULY 25 UPDATE: On July 23, 2024, a higher Federal Court reversed the preliminary injunction that had temporarily blocked the FTC from enforcing the rule. On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule banning many noncompete clauses in employee contracts and several parties quickly …

Introduction In February 2024, lawmakers in California introduced Assembly Bill 2098 and Assembly Bill 2637.  Both bills would make changes to loans offered by the California Health Facilities Financing Authority (CHFFA), an important entity that helps struggling California hospitals. These loans are often essential to communities because they help the local hospitals get back onto sound financial footing. Background The California Legislature created CHFFA in 1979 to provide financial help to hospitals and other healthcare providers via loans that are funded through the issuance of tax-exempt bonds.  The financing can be …