AAI Asks Massachusetts Court to Adopt Process for Public Comment on Hospital Merger Settlement

Today, the American Antitrust Institute (AAI) asked a Massachusetts Superior Court judge to adopt a process for public comment on the proposed settlement of a complaint brought by the Massachusetts Attorney General challenging the acquisition by Partners Healthcare Systems Inc.’s of South Shore Hospital and Hallmark Health System.  The settlement does not require any divestitures, but rather imposes behavioral remedies, including component contracting, growth restrictions, and price caps.

In a letter to the court, the AAI pointed out that “the complaint and other filings make clear that the acquisitions are anticompetitive and illegal and would raise prices.  Implicit in the loss of competition between Partners and the acquired hospitals is also a likelihood of reduced quality and accessibility of healthcare services for consumers in the Commonwealth.”

The AAI said it was “concerned that the settlement does nothing to address non-price anticompetitive effects of the acquisitions, and that its attempt to remedy the likely anticompetitive price effects through a complex regulatory approach will be harmful to the public interest.”

The AAI recommended that the Court adopt a process akin to that used under the federal Tunney Act under which stakeholders could file public comments, the Attorney General would respond to the comments, and a hearing would be held to consider whether the settlement is in the public interest.

Contact Richard Brunell, AAI General Counsel, 202-600-9640.