Regulators hit Idaho health system for not unwinding physician practice acquisition

State and federal regulators claim Idaho-based St. Luke's Health System is not complying with a federal court decision to unwind its acquisition of Saltzer Medical Group, the state's largest physician practice, according to the Idaho Statesman.

The case drew nationwide attention because it was the first to challenge a hospital-physician practice buyout since the passage of the Affordable Care Act. 

Last week, the Idaho Attorney General's Office and the Federal Trade Commission (FTC) filed court documents alleging St. Luke's only plans to divest part of the Saltzer acquisition, according to the article. 

But Saltzer has shrunk significantly since the purchase and lawsuit, losing more than 10 doctors, according to the article. The practice also shut down entire specialty departments, including physical therapy, laboratory testing and radiology, transferring those services to St. Luke's and is not willing to take them back, the Statesman reports.

The kind of divestment the ruling ordered is easier said than done, Jonathan K. Lewis, an antitrust lawyer with Baker Hostetler in the District of Columbia, told the Statesman. "Part of the problem is you're talking about people ... not a plant [or] a piece of equipment," he said.

The initial ruling ordered St. Luke's to "fully divest," but during the appeals process, the divestiture was put on hold. When St. Luke's lost its appeal, the FTC and the state claim, St. Luke's was required to submit a divestiture plan within the next 10 days, according to the article. The Ninth Circuit Court of Appeals denied a petition to rehear the case in April.

St. Luke's and Saltzer's attorneys, meanwhile, have filed a motion to appoint a "master" to manage the divestiture process due to its complexity, according to the Idaho Press. A master, they argue, would help determine the best course of action for issues such as Saltzer's phasing out of services. While both providers have reached out to state and federal regulators while developing a divestiture plan, neither the FTC nor the Attorney General have offered help or advice, St. Luke's Spokeswoman Beth Toal told the publication.

The plaintiffs, however, said the defendants have given them "limited information" during the divestiture process, forcing them to rely on rumors about St. Luke's and Saltzer's future plans. "What we have been told, however, is disturbing," they wrote, according to the Statesman.

To learn more:
- read the Statesman article with embedded court documents
- here's the Idaho Press article

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