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New Federal Guidelines May Hinder UPMC and Washington Hospital Merger

By  |  July 31, 2023
A rare hiccup in the rapid expansion of the Pittsburgh-based healthcare behemoth could derail UPMC’s efforts to merge with an independent health system in Washington County.

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    On July 18, the Federal Trade Commission and the Department of Justice’s antitrust division simultaneously released proposed merger rules that could make it harder to merge the healthcare industry by adding more specific assessment criteria. The planned connection between UPMC and Washington Health System might be delayed or abandoned if the revisions are implemented, according to experts.

    Comments on the new guidelines will be accepted until Sept. 18. “The Biden administration has been very vocal in saying they’re going to be very aggressive in the number of challenges and in trying novel theories of potential harm,” said Lauren Norris Donahue, partner and antitrust attorney in the Chicago office of K&L Gates. “It’s across all industries, but health care has been a focus of the Biden administration for enforcement actions.”

    Read more:Congress Members Look To Strengthen Federal Privacy Laws In Medical Data 

    After a 30-day preliminary assessment, the vast majority of deals examined by the FTC and Department of Justice are authorized. But according to Ms. Donahue, a court injunction can be invoked to prevent two organizations from coming together for antitrust purposes, reported Post Gazette. 

    A non-binding letter of intent to pursue an affiliation with UPMC, a $26 billion healthcare and insurance behemoth with 95,000 employees, was signed by the board of directors of Washington Health System in June. The deal’s financial specifics were kept confidential.

    The two federal agencies share enforcement duties and the draft guidelines are just that — non-legally binding principles used to analyze deals that “reflect some key themes the agencies have highlighted in recent cases and advocacy, including concerns about concentration of markets, serial acquisitions, competition in labor markets and practices by dominant firms that cement their position and harm competition,” according to an advisory from the law firm of Buchanan Ingersoll & Rooney PC.

    Source: Post Gazette