AHA pushes for fewer regulatory tools in blocking mergers

The American Hospital Association (AHA) has thrown its support behind federal legislation intended to streamline how the two federal agencies involved in reviewing mergers go about the process.

The lobby supports the Standard Merger and Acquisition Reviews Through Equal Rules (SMARTER) Act, which is currently wending its way through the House of Representatives, according to AHA News Now.

SMARTER changes how the Federal Trade Commission (FTC) undertakes a review of mergers between hospitals. If signed into law, it would only allow the agency to pursue injunctions in federal court and forbid it from engaging in what is known as administrative litigation to block a deal. By contrast, the U.S. Department of Justice only moves to block deals it objects to in federal court.

AHA Executive Vice President Rick Pollack characterized the tactic as "double jeopardy" in a letter he sent earlier this week to the chairman and ranking member of the House Judiciary Committee.

"This unfair and punitive tactic should not be permitted," Pollack wrote. "While AHA supports enforcement of the antitrust laws, relying exclusively on the federal courts to determine the competitiveness of a transaction ensures that hospitals, and others, receive a full hearing on the merits."

Despite the concerns aired by the AHA, mergers among hospitals and other healthcare players are on the rise and there have been very few objections aired by either federal or state regulators against such deals going through. And executives believe such deals will continue to grow.

Pollack also urged the committee to consider a clause in the law that would also compel the Justice Department and the FTC to include a closing statement when they decide to let a merger move forward. Pollack argued that this would provide more predictability to the merger process and make it more likely that his constituents would avoid mergers they believe the agencies would likely strike down. 

To learn more:
- read the AHA News Now article
- check out the AHA letter (.pdf)