In November of 2024, three lawsuits were filed by pharmaceutical manufacturers against the Department of Health and Human Services (HHS) and the Health Resources and Services Administration (HRSA), challenging how HRSA oversees the Federal 340B Drug Pricing Program.  (HRSA is the sub-agency within HHS that administers the 340B Program). The potential impact of the lawsuits on the 340B Program is significant in its own right, but the outcome of the lawsuits could also have an indirect effect on merger and acquisition activity.  Research has indicated that the merger and acquisition […]

Healthcare market oversight at the federal level is primarily done through litigation brought by the Federal Trade Commission (FTC) or the Department of Justice (DOJ).  Any change in administration in Washington will change the focus and priority of these agencies.  Nonetheless, the second Trump administration has indicated that it will make wholesale changes to federal agencies, including the FTC and DOJ, that exceed those that are typical during a change in administration.  These indications raise many questions about the new role of the FTC and DOJ in healthcare markets: How […]

On October 18, 2024, the North Carolina Supreme Court unanimously ruled to send a case challenging the states Certificate of Need (CON) law back to a lower court.  Certificate of Need laws require healthcare providers and facilities to get permission from the state government before adding or expanding healthcare services, equipment, or facilities.  To get this permission, the provider must show that the new service is needed, hence the name. The case in North Carolina originated in April 2020 when Dr. Jay Singleton, an eye surgeon, filed suit against legislative […]

On September 23, 2024, Particle Health, a startup that aggregates and shares data among healthcare providers and health technology companies, filed suit in the U.S. District Court for the Southern District of New York against Epic Systems, the nation’s largest vendor of electronic health records.  The suit alleges that Epic is using its market power to destroy competition and represents a challenge to Epic’s dominance in the patient data marketplace. Parties to the Suit Epic is a software company that provides electronic health record (EHR) resources for hospitals and health […]

New laws and rules requiring greater transparency into the behaviors and reimbursements of insurers have given employees and employers a clearer picture of where their healthcare dollars are going.  For example, the “Transparency in Coverage” rule, implemented in October 2020, required health plans and insurers to post rates they negotiate with providers and develop price transparency tools related to cost-sharing.  The “Consolidated Appropriations Act”, passed in 2021, requires Third Party Administrators (TPAs) to provide notice of other compensation they receive to plan sponsors and restricts “gag clauses” that would otherwise […]

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, […]

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 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 […]

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 […]

This spring, court cases are dealing with a variety of issues relevant to healthcare marketplace competition issues.  These include a Federal Trade Commission’s (FTC’s) action to block a sale of hospitals in North Carolina, examining the fiduciary duties employer-sponsored health plans have in selecting drug plans, and looking at the acceptability of non-compete clauses in physician contracts. FTC Files suit in North Carolina In February, the FTC authorization of a suit to block Novant Health’s proposed acquisition of two hospitals owned by Community Health Systems (CHS) in North Carolina.  On […]