Regulators pause Tulane-LCMC merger

Ellie Cowen, Staff Writer

Tulane’s $150 million deal with LCMC to sell them three hospitals is now on pause after the Federal Trade Commission filed a lawsuit regarding federal antitrust law violations. (Staff Photo)

The Federal Trade Commission has halted Louisiana Children’s Medical Center’s acquisition of three Tulane-operated hospitals, arguing the sites must remain open until regulators decide whether the deal violated federal antitrust laws. 

LCMC bought Tulane’s three hospitals in a $150 million deal last year. Health systems are required by federal law to submit hospital consolidations greater than $101 million to the FTC for approval. LCMC argued they are not subject to this federal regulation based on a Louisiana state law giving state legislators oversight over hospital consolidations. 

The lawsuit followed an LCMC suit against the FTC for fines and penalties imposed on LCMC in April. That lawsuit also seeks a declaratory judgment from the court that the federal law in question, the HRS Antitrust Act, is not applicable to the acquisition. 

The purpose of the federal oversight law is to prevent unfair competition in the market. Acquisition of the three hospitals by LCMC would leave only two hospital systems in New Orleans – LCMC and Ochsner Health. The Biden administration has expressed support for antitrust efforts, disrupting deals in New York, Utah and New Jersey.

“The merger will enhance competition, lead to greater access to health care, result in higher quality health care and will likely not result in undue increases to costs,” Louisiana Attorney Jeff Landry said in a public statement. “I will explore all of our state’s legal options to fight this federal overreach.”

The question facing the courts now is if the LCMC acquisition is subject to oversight from the FTC under the federal law. Even if the FTC wins the case, LCMC could still receive approval from the agency for the consolidation, though it is unclear how the FTC would decide. 

Tulane and LCMC said they are moving forward with an “integration of services,” despite the continuing lawsuits. A federal judge ruled that LCMC cannot close any of the three hospitals and must continue providing services while the case is decided.

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