Antitrust agreement will protect our citizens’ best interests

Updated 2 years ago From a News Release by WV Attorney General Patrick Morrisey
CHARLESTON, W.Va. – Attorney General Patrick Morrisey  announced his Office’s Antitrust Division has reached an agreement with Cabell Huntington Hospital, Inc., in its acquisition of St. Mary’s Medical Center.
 
The agreement, filed Friday morning in Cabell County Circuit Court, establishes a series of conditions to ensure the acquisition complies with the West Virginia Antitrust Act, the federal Sherman Antitrust Act, and all other applicable state and federal laws.

 
“My Office takes its antitrust responsibility very seriously,” Attorney General Morrisey said. “We strive to make sure any mergers or acquisitions preserve economic competition and do not have a negative effect on the state and its citizens.”
 
In November, Cabell Huntington Hospital announced an agreement to acquire St. Mary’s after the Pallottine Missionary Sisters, the Catholic-affiliated organization that had operated the hospital for 90 years, decided to end their sponsorship of the medical center.
 
“This acquisition represents the combination of two large and vitally important health care centers in the greater Huntington area,” Attorney General Morrisey said. “St. Mary’s Medical Center and Cabell Huntington Hospital represent the seventh and eleventh largest private employers in the state, respectively, and the top two employers in Cabell County. Serving residents of three states, the combined hospital company would represent the second-largest hospital chain in the state.”
 
Under the agreement, Cabell Huntington and St. Mary’s do not admit to any violations of state or federal antitrust laws. The hospitals voluntarily cooperated with the Attorney General’s Office in a good faith effort in the interest of promoting appropriate standards of conduct within the health care industry.
 
As part of the agreement, both hospitals agree to adhere to the following conditions for the seven-year period following the acquisition:
  • Cabell Huntington will agree that St. Mary’s Medical Center will be maintained as a free-standing, general acute care, faith-based organization for the seven-year period.
  • Neither hospital will increase its service rates beyond the benchmark rate established by the West Virginia Health Care Authority
  • If the combined operating margins of the hospitals exceed an average of 4 percent during any three-year period, the hospitals’ rates will be reduced by the amount of excess for the following three years.
  • Both hospitals will release employees from any non-compete agreements following the termination of their employment.
  • The hospitals will maintain open staffs and grant privileges to all qualified physicians, and not terminate privileges to those who start offering services in competition to the hospitals (excluding groups that historically have operated under exclusive agreements).
  • The hospitals will not oppose the award of a certificate of need by the state Health Care Authority to any health care provider that seeks to provide services in their market area (excluding the request from any inpatient hospital that does not accept Medicaid and/or uninsured patients.
The hospitals also agree to the following conditions to improve access and enhance the quality of health care:
  • Implement community wellness programs that will reach out to medically under-served areas, and report details on these programs each year to the Attorney General’s Office.
  • Develop quality and population health goals, including Centers of Excellence with quantitative benchmarks and a proposed timeline to be submitted to the Attorney General within six months of closing the transaction.
  • Establish a fully integrated and interactive medical record system at both facilities so that patient encounters can be readily available to physicians at both hospitals.
  • Notify the Attorney General’s Office within 90 days of any proposed addition or deletion of any health care service line.
  • Continue to accept Ohio and Kentucky Medicaid patients at in-state provider rates established by those states.
“Unfortunately, with the recent increased federal regulation in the health care industry, the trend of hospital consolidation will likely increase over the coming years as hospitals struggle to deal with the increased costs of regulation,” Attorney General Morrisey said. “However, I believe given the conditions negotiated in our agreement, the best interests of our citizens will be protected.”
 
The full agreement, with further details on conditions, can be viewed at http://bit.ly/1DVzzgG.
 
In consideration of these conditions, the Attorney General’s Office will support Cabell Huntington’s acquisition of St. Mary’s and communicate its support to the Federal Trade Commission, which is also reviewing the matter. 
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