Proceed with Caution: Antitrust Considerations and Guardrails for Hospital Mergers and Acquisitions

• July 07, 2023

• Carrie A. Hanger , Nelson Mullins Riley & Scarborough LLP
• Denise M. Gunter , Nelson Mullins Riley & Scarborough LLP
• Colleen Pleasant Kline , Nelson Mullins Riley & Scarborough LLP

When contemplating a merger or other transaction, hospitals, health systems, and any other providers are subject to the federal antitrust laws that apply to dealings between competitors. Of particular relevance to hospital mergers and acquisitions are Section 1 of the Sherman Antitrust Act, which prohibits unreasonable restraints of trade; Section 2 of the Sherman Act, which prohibits monopolies and attempts to form a monopoly; Section 45 of the Federal Trade Commission Act, which prohibits unfair methods of competition; and Section 7 of the Clayton Act, which prohibits combinations where the effect “may be substantially to lessen competition, or to tend to create a monopoly.” In addition, the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, requires the parties to certain transactions to submit a premerger notification and report filing to the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) and then wait a proscribed statutory waiting period prior to closing. Depending upon where the parties are located, there may also be state antitrust laws that apply.

ARTICLE TAGS

• Antitrust