Litigation

United States v. Geisinger Health and Evangelical Community Hospital

Date Filed: August 5, 2020
Status: Decided
District Court: Middle District of Pennsylvania – Case No. 4:20-CV-01383-MWB
Nature of Suit: Antitrust
Defendant Type: Provider
Plaintiff Type: Federal
Case Info: https://www.justice.gov/atr/case/us-v-geisinger-health-and-evangelical-community-hospital, https://sourceonhealthcare.org/healthcare-merger-challenges-q1-2021-update/
Court Document: https://www.justice.gov/opa/press-release/file/1301656/download, https://www.justice.gov/opa/press-release/file/1373366/download

In August 2020, the DOJ filed suit in the district court of Pennsylvania, challenging agreements that include Geisinger Health System’s bid to acquire 30% ownership of Evangelical Community Hospital (ostensibly to avoid antitrust scrutiny) and other potentially anticompetitive conduct involving “significant entanglements” between the two parties. The DOJ took the lead over FTC in this case as it brought the suit under both Section 7 of the Clayton Act and Section 1 of the Sherman Act. The complaint alleges that the two entities are close competitors for inpatient general acute care services in a six-county region in central Pennsylvania, and the transaction is likely to substantially lessen competition as the two entities would account for 71% of the relevant market. In addition to the partial ownership stake, the complaint alleges the agreement between the parties gives Geisinger the right of first offer and first refusal for certain transactions and joint ventures of Evangelical, which “fundamentally alters the relationship between the parties, raising the likelihood of coordination and reducing Defendants’ incentives to compete aggressively against each other.”

In March 2021, the parties reached a settlement agreement in which Geisinger agreed to reduce and limit any future ownership interest of Evangelical to a cap of 7.5%. Additionally, among other settlement terms, Geisinger is restricted from making any loan or line of credit associated with Evangelical, and from being involved in any decision-making in management or leadership positions at Evangelical. Finally, the parties also agreed to implement an antitrust compliance program.


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