Coalition of attorneys general move to block Hackensack Meridian Health, Englewood Health merger

Woman tears agreement documents in front of agent
With a preliminary injunction on Hackensack Meridian's proposed acquisition in the balance, law enforcement heads worry that reversing the block could weaken federal antitrust enforcement of large systems' merger deals.(Getty/BernardaSv)

Twenty-five attorneys general have filed an amicus brief urging an appellate court to uphold a block on the proposed merger of New Jersey’s Hackensack Meridian Health and Englewood Health.

Headlined by California Attorney General Rob Bonta and Pennsylvania Attorney General Josh Shapiro, the collection of state and territory law enforcement heads wrote that an August district court ruling in favor of the Federal Trade Commission was correct in determining that the hospitals’ deal was anticompetitive and would lead to higher prices and lower-quality care.

In a statement, Bonta wrote that he and other attorney generals were crossing state lines to weigh in because their offices only have final approval of non-profit hospital transactions. For-profit deals instead fall under federal antitrust regulations, Bonta said, making the New Jersey district court’s decision “critical” in preserving antitrust law enforcement and the health of the hospital market.

“In our settlement with Sutter Health, we were able to ensure increased transparency and end practices that decrease the accessibility and affordability of healthcare,” Bonta wrote in a statement. “However, we look to federal agencies and federal antitrust law to prevent potential anticompetitive mergers of for-profit hospitals and of other providers. With COVID-19 continuing to impact communities across the country, affordable and accessible healthcare is more important than ever. We have to get this right.”

The acquision deal announced in late 2019 would see Edison, New Jersey-based Hackensack Meridian Health take control of three out of six inpatient general acute care hospitals in the state’s Bergen County. Hackensack is the largest health system in New Jersey.

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The FTC challenged the merger in Dec. 2020 on the grounds that it would eliminate competition in New Jersey’s most populous county and was granted a preliminary injunction on Aug. 4.

Hackensack and Englewood filed an appeal on Aug. 26 and have argued that their merger would open the door for more investments into community programs, care coordination across the larger health system, expanded care capabilities and various cost efficiencies.

In their recent filing, the attorneys general said they’ve seen recently health system consolidation within many of their states or territories, as well as the leverage it provides over payers and employers in affected local markets.  

“Mergers increasing the bargaining power of large healthcare systems result in higher prices without any substantial improvements in quality for consumers,” they wrote in the brief.

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Bonta and Shapiro were joined in the filing by the attorneys general of Colorado, Connecticut, Delaware, Guam, Idaho, Illinois, Indiana, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New Mexico, New York, Nevada, North Carolina, North Dakota, Oregon, Rhode Island, Virginia, Washington, Wisconsin and the District of Columbia.

Their position is shared by President Joe Biden, who over the summer instructed he FTC and the Department of Justice to take a stronger stance on healthcare mergers “to ensure patients are not harmed” by increased provider consolidation.

Lawmakers have also taken aim at large health systems’ anticompetitive practices. Just last week Sens. Mike Braun, R-Indiana, and Tammy Baldwin, D-Wisconsin, introduced legislation that would, among other things, prohibit systems from requiring a payer or employer to contract with an affiliated provider or hospital as a condition of entering into a contract with the system.