CERTIFICATES OF PUBLIC ADVANTAGE: BYPASSING THE FTC IN HEALTHCARE MERGERS?

By Lisl Dunlop¹

I. INTRODUCTION

Over the past several years, faced with rising costs, pressures to improve quality, changes to insurance reimbursements, and other regulatory developments, the healthcare field has witnessed increasing consolidation. This is particularly true for physician practice groups and hospitals. But, this consolidation also has been subject to increased scrutiny from federal antitrust regulators. Whether it is a merger between the two leading providers of general acute care inpatient hospital services near Chicago, Illinois² or the acquisition of a clinic employing 60 physicians in North Dakota,³ healthcare entities in regions with few competitors face significant antitrust obstacles in their efforts to merge.

At the same time, state policymakers have recognized that collaboration among healthcare providers, including mergers, can lead to better public health outcomes while reducing costs. To promote such collaborations, some states have stepped in and enacted laws that permit competing hospitals or healthcare systems to apply for a Certificate of Public Advantage ("COPA") under which they can engage in joint activities, including merger transactions, that otherwise may be prohibited by the federal antitrust laws.⁴ According to the states, the benefits of these arrangements to state healthcare goals outweigh the potential harms resulting from lost competition.

The Federal Trade Commission ("FTC") staunchly opposes COPA laws. Because the antitrust laws do not prohibit all competitor collaborations, only anticompetitive ones, the FTC believes that COPAs are unnecessary to permit procompetitive transactions and merely serve to protect anticompetitive ones.⁵ While the FTC maintains that there is strong economic evidence supporting its view that consolidation harms healthcare pricing and quality, several states have rejected FTC concerns and granted COPAs to merging healthcare providers.⁶

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There has been limited experience with COPA-enabled mergers to date, so it remains to be seen whether COPAs will actually deliver the public health outcomes and other public benefits sought by state regulators. Given the current uncertainty and complexity of healthcare markets today, however, permitting states to experiment with different models and to have greater visibility and control over healthcare entities within their own borders may make public health goals more attainable, even at the cost of an independent competitive environment.

II. THE CURRENT STATE OF HEALTHCARE MERGER ANTITRUST ENFORCEMENT

Beginning with its success in challenging the consummated Evanston Northwestern/ Highland Park merger in 2008,⁷ the FTC has logged a consistent track record of success in litigating against merging healthcare entities. Most recently, in 2016, the FTC litigated two merger challenges almost simultaneously—one in Pennsylvania and the other in Illinois—winning preliminary injunctions against both at the appeals level.⁸ Today, the FTC’s approach to healthcare merger enforcement, and the economic literature supporting that approach, have clearly been accepted by the federal courts.

Notably, in the course of this impressive history of merger challenges, the FTC and the courts have given short shrift to hospitals’ claims that their transactions result in efficiencies and cost-savings that outweigh the potential anticompetitive effects of a merger. The courts have endorsed FTC requirements that claimed efficiencies be merger-specific, verifiable and not themselves result in anticompetitive outcomes. Where transactions lead to clear increases in concentration, the FTC and the courts have required the efficiencies to offset the potential anticompetitive harm to be "extraordinary" and subject to a high level of proof.⁹ In fact, going further, several appellate courts have questioned whether efficiencies can ever be sufficient to overcome competitive concerns.¹⁰

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The various court decisions also agree with the FTC that the healthcare policy dictates of the Affordable Care Act do not support a drive by hospitals to "unite and survive."¹¹ The FTC has consistently rejected this concept in numerous speeches, advocacy letters and merger challenges, arguing that there is nothing in healthcare policy that displaces the antitrust laws, and collaborations seeking to advance the aims of healthcare policy can be equally effective operating within the existing antitrust framework.¹²

As a result, in the current enforcement landscape it is very difficult for transactions leading to high levels of concentration in acute care hospital markets and physician markets to pass antitrust muster, even where there are significant overriding considerations of continued survival of local services, better management of the care continuum, and potential public health or other benefits that may be gained from a transaction.

III. BACKGROUND TO COPA LAWS

Under the state action doctrine, state governments and certain private actors may be immunized from antitrust liability by the operation of a state regulatory scheme. The FTC has had considerable experience and success in narrowly confining state-action immunity, including its most recent Supreme Court victories in North Carolina State Board of Dental Examiners¹³ and Phoebe Putney.¹⁴ As currently articulated by the Supreme Court, the Sherman Act does not interfere with a state’s own anticompetitive policies, but does not shield the anticompetitive conduct of non-sovereign actors unless they "result from procedures that suffice to make it the State’s own."¹⁵

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The party seeking immunity must first demonstrate that the challenged collaboration was undertaken pursuant to a "clearly articulated" affirmative state policy to supplant competition with regulation. This first prong ensures that the state has indeed, as a matter of policy, authorized departures from the norm of free market competition. Second, state action immunity requires "active supervision" of the private conduct by the state, such that any restraint on competition is a result of knowing, deliberate, state intervention rather than simply an agreement among private parties.

Phoebe Putney illustrates the first prong of the state action doctrine in a hospital merger case.¹⁶ In that case, a county hospital in Georgia acquired a competing hospital and, essentially, a monopoly on acute-care services in the county. The hospital claimed that the state action doctrine immunized the merger from antitrust review because Georgia law specifically authorized county hospitals to make acquisitions. However, the Supreme Court found that although the state enabling statutes permitted acquisitions, they did not declare that the state had authorized monopolies or exempted county hospital mergers from antitrust law. Thus, the transaction was not immune from the antitrust laws.¹⁷

The second prong of the state action doctrine was at issue in the FTC’s March 2015 victory in the North Carolina State Dental Board case. In the North Carolina Dental Board case, the Dental Board, consisting of practicing dentists, had excluded non-dentists from the teeth-whitening market, granting practicing dentists a monopoly on teeth-whitening services. The Dental Board invoked the state action doctrine on the grounds that its actions were the actions of the "sovereign." But the Supreme Court concluded that state boards, when controlled by practicing professionals, are not "sovereign" and do not enjoy state action immunity because their actions represent the interests of private parties. The Court held that when state boards or agencies are controlled by practicing professionals, their actions need to be "actively" supervised by the state. The FTC subsequently issued guidance on what is needed to meet the "active supervision" requirement.¹⁸

IV. HOW DO COPA LAWS WORK?

Certificate of Public Advantage laws seek to utilize the state action doctrine to shield healthcare collaborations and transactions from federal antitrust oversight. The laws typically authorize "cooperative agreements" among providers (usually including mergers) on the grounds that they can improve quality, moderate cost increases, improve access to healthcare services, and help keep smaller hospitals open, particularly in rural areas. COPA laws typically direct that competition is one issue to be taken into account in considering the grant of a COPA, but not the only issue.

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COPA laws are typically expressly drafted to meet the requirements of the state action doctrine. Most include direct language clearly expressing the intention to displace the antitrust laws. For example, New York’s COPA law states: "To the extent such arrangements, or the planning and negotiations that precede them, might be anti-competitive within the meaning and intent of the state and federal antitrust laws, the intent of the state is to supplant competition with such arrangements under the active supervision and related administrative actions of the commissioner as necessary to accomplish the purposes of this article, and to provide state action immunity under the state and federal antitrust laws…"¹⁹ COPA laws typically grant state departments of health and health commissioners the power to review COPA applications, grant COPAs and supervise the merging parties’ conduct under COPAs, meeting the active supervision requirement for state-action protection.

Between 1992 and 1995, at least 18 states passed a form of COPA legislation,²⁰ possibly as an alternative to rate-setting and "all-payer" system experimentation that was taking place in various states around that time. But very few COPAs were actually applied for or issued under those laws. Notable exceptions are the Mission Health COPA in North Carolina issued in 1995 and the Benefis Health System COPA in Montana issued in 1996. There has been limited analysis of the impact of these COPAs on healthcare prices, quality and other public health measures.²¹ Notably, on November 1, 2017, the FTC issued a Staff Notice requesting empirical research and public comments on the impact of COPAs.²²

More recently, new COPA laws have been introduced in some states and more active interest taken in pre-existing laws in others. This activity appears to be in reaction to the FTC’s aggressive enforcement approach to healthcare transactions. For example, in 2016, the West Virginia legislature passed a COPA law following the FTC’s challenge to a local hospital merger, effectively shielding the transaction from FTC enforcement.²³ And in late 2015, Tennessee and Virginia revised their existing COPA laws and introduced detailed regulations for COPA applications in anticipation of the proposed merger of the Wellmont and Mountain States health systems.

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V. FTC OPPOSITION TO COPA LAWS

The FTC has repeatedly advocated against the introduction of COPA laws, as well as the granting of COPAs once legislation is in place. The FTC suggests that in passing COPA laws, states fundamentally misunderstand the purpose and scope of federal antitrust laws and that the consumer benefits the antitrust laws seek to preserve are consistent with state public health concerns. Because the federal antitrust laws permit procompetitive joint activity, argues the FTC, proposed laws granting antitrust immunity, or grants of COPAs under such laws, must be designed to shield anticompetitive behavior that would not otherwise pass muster under federal antitrust law. As a result, the FTC contends that state COPA laws pose substantial risk of consumer harm.²⁴

In general, the federal antitrust laws prohibit competitors from engaging in conduct that would restrict competition. The laws are founded on the premise that competition among sellers in an open marketplace gives consumers the benefits of lower prices, higher-quality goods and services, greater access to goods and services, and innovation. At one end of the spectrum, the laws summarily prohibit obviously anticompetitive activities, such as price-fixing or market-allocation agreements between competitors. More complex, however, is the treatment of restrictions in the context of activities that otherwise increase efficiency and benefit consumers, such as collaborations of healthcare providers.

The FTC’s focus in challenging consolidations or collaborations in the healthcare area has principally been on conduct that may result in collective negotiation of reimbursement rates with commercial providers. The FTC firmly believes that such collective negotiation—particularly where the collaborating providers represent a substantial portion of competing providers of a particular service or specialty—is likely to result in increased provider bargaining leverage, increased reimbursement rates, and eventually higher premium and out-of-pocket costs to consumers. The FTC’s concerns in this regard are supported by academic literature concerning the impact of provider consolidating on prices.²⁵

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In addition to questioning the basis and need for COPA laws, the FTC also has raised specific concerns with the effectiveness of state oversight in managing the potential anticompetitive impacts of a competitor collaboration through detailed conditions. For example, with respect to the New York COPA process for DSRIP²⁶ performing provider systems, the FTC raised concerns about information sharing, joint payor negotiations, and potential spillover effects into commercial healthcare markets (since DSRIP relates only to Medicaid). In the recent Wellmont/Mountain States COPA application review in Tennessee, the FTC cautioned on the difficulty of executing a plan of separation (required as part of the COPA application) should the state later decide that the affiliation is not operating as expected.

VI. POLICY ARGUMENTS IN FAVOR OF COPA LAWS

The impacts of COPA laws are not as black and white as the FTC would have it. Far from rejecting the application of antitrust principles to competitor collaborations, competition principles remain a central element of the analysis for most COPA laws. What the COPA laws effectively do, however, is displace federal antitrust agencies and courts as the decision-makers in assessing the effects of the reduction in competition from a transaction, place greater emphasis on efficiencies and other non-competition factors, and foster a regulated post-merger environment. All three of these effects are at odds with the FTC’s traditional policies in reviewing merger transactions.

First, in passing COPA laws, states are not necessarily rejecting the role of antitrust in maintaining the benefits of healthcare competition, but rather the role of the FTC as sole arbiter of whether and how competitor collaborations should go forward. Although the FTC and its Part 3 administrative court have significant expertise and experience in merger analysis—and healthcare merger analysis in particular—many states also have antitrust expertise in state attorneys general antitrust bureaus, and most COPA statutes direct collaboration between the attorney general and the state health department in reviewing applications. This regulatory collaboration may make COPA decision-makers better placed to investigate and assess both competitive impact and the contribution of a healthcare transaction to state healthcare policy goals.

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Second, COPA laws place greater emphasis on efficiencies and public health benefits than traditional FTC merger analysis. The FTC’s Horizontal Merger Guidelines set a high bar for the proof of efficiencies in order for them to carry any weight in a merger review. This policy is underscored by judicial skepticism of the efficiencies defense. Many of the efficiencies considered in COPA applications would fail the FTC’s tests of merger specificity or verifiability. And public health benefits are likely non-cognizable under FTC standards.

Noneconomic justifications for anticompetitive behavior are regularly rejected by the FTC and courts. As explained by the Supreme Court in National Society of Professional Engineers v. United States, 435 U.S. 679, 689 (1978), when rejecting a public health and safety affirmative defense for anticompetitive behavior, the rule of reason standard, under which mergers and other agreements are assessed, "does not open the field of antitrust inquiry to any argument in favor of a challenged restraint that may fall within the realm of reason. Instead, it focuses directly on the challenged restraint’s impact on competitive conditions."²⁷

COPA laws effectively remove this limitation to merger analysis conducted by state departments of health and allow the consideration of noneconomic benefits that may not be easily quantifiable. In the COPA process, the reviewing agency is expressly directed to take healthcare policy goals and efficiencies into account and to judge the likelihood of achieving claimed benefits of the transaction by a similar standard to that applied to assessing the potential competitive concerns. In the Ballad Health COPA decision, for example, the Tennessee Health Commissioner analyzed each separate claimed benefit and found that benefits would be likely to occur in the areas of: enhancement of hospital and hospital-related care quality; preservation of hospital facilities close to the communities they traditionally service; gains in cost containment and cost-efficiency of hospital services; improvement in the utilization of hospital resources and equipment; population health improvement in the region served; investments in programs and partnerships to address and ameliorate behavioral and addiction problems; and acceleration of risk-based contracts.²⁸

Third, the COPAs granted in Idaho, North Carolina, New York, and most recently Tennessee all contained detailed terms and conditions under which the merged entity would operate going forward. These terms and conditions provide for regular reporting, requirements to meet predicted cost-saving and quality targets, information firewalls where appropriate, and limitations on future managed care pricing.

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In the Ballad Health COPA, for example, the terms and conditions included: restrictions on health plan negotiations and limitations on managed care pricing; prohibitions preventing Ballad Health from restricting suppliers, vendors or other contractors from contracting with competitors; prohibitions preventing Ballad Health from opposing the award of Certificates of Need in the region; prohibitions on restricting non-employed physicians from performing services outside Ballad Health; various aggregate and annual spending commitments tied to specific services, research, education and population health improvement; employee benefits and protections; and quality of care requirements. The conditions also established procedures to ensure access to healthcare services, by requiring certain facilities to remain hospitals; requiring health commissioner approval to remove or repurpose other hospitals, facilities or service lines; requiring discounts for under- or uninsured patients; and implementing a charity care policy.²⁹

The FTC has consistently preferred structural remedies over behavioral or conduct remedies in merger cases.³⁰ One of the key drawbacks of conduct remedies is the need for detailed ongoing oversight and monitoring of compliance by the agency, which has been perceived as difficult to manage and enforce. The FTC has accepted short-term conduct remedies in conjunction with structural remedies, or in cases where a structural remedy was impossible (such as in the Evanston/Northwestern transaction, where the FTC’s challenge was brought post-closing after the parties had merged), but they remain a rarity. Thus, the premise of a COPA’s terms and conditions and ongoing close supervision by the state authority (which also is an essential element for application of the state action doctrine) runs against this policy.

Finally, COPA laws inherently recognize that competition may not be the sole means of addressing public health concerns and that antitrust enforcement alone may not resolve the concerns facing the healthcare industry. The FTC’s criticisms of COPA laws ignore the states’ broader policy interests in managing healthcare concerns within their own borders—such as access to healthcare for underserved communities—which may supersede antitrust concerns. The FTC itself recognized this in a 2004 study:

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". . . competition is not a panacea for all of the problems with American healthcare. Competition cannot provide its full benefits to consumers without good information and properly aligned incentives. Moreover, competition cannot eliminate the inherent uncertainties in healthcare, or the informational asymmetries among consumers, providers, and payors. Competition also will not shift resources to those who do not have them."³¹

This concern also has been recognized by former Commissioner Julie Brill, who noted:

"Healthcare policy makers at the state level are faced with difficult issues separate and apart from the strong benefits competition brings to healthcare markets. These include the critically important issue of preserving access to care for the needy, and doing so in a complex market, involving informational asymmetries among patients, providers, and payors. In this context, it is important to understand that competition will not move resources from those that can afford healthcare to those that cannot."³²

Going forward, the FTC is likely to continue to oppose the grant of antitrust immunity to healthcare collaborations under COPA laws and the expansion of those laws. But for parties considering transactions in states in which COPA laws are already on the books, or where legislators may be interested in introducing such a process, they may be a viable route forward.

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Notes:

^1. Lisl Dunlop is a partner in the New York office of Manatt, Phelps & Phillips LLP and Co-Chair of the firm’s Antitrust Practice. The author gratefully acknowledges the research assistance of Shoshana Speiser in preparing this article.

^2. See FTC v. Advocate Health Care, No. 15 C 11473, 2017 WL 1022015 (N.D. Ill. Mar. 16, 2017) (granting motion for preliminary injunction to block the parties from consummating their proposed merger).

^3. Press Release, FTC, FTC and State Attorney General Challenge Physician Group Acquisition in North Dakota (June 22, 2017), available at https://www.ftc.gov/news-events/press-releases/2017/ 06/ftc-state-attorney-general-challenge-physician-group-acquisition.

^4. See, e.g., N.Y. State Dep’t of Health, Certificate of Public Advantage (last visited Oct. 25, 2017), https://www.health.ny.gov/health_care/medicaid/redesign/copa/; Tenn. Dep’t of Health, Certificate of Public Advantage (last visited Oct. 25, 2017), https://www.tn.gov/health/article/ certificate-of-public-advantage.

^5. See, e.g., Letter from Marina Lao, Director, FTC Office of Policy Planning, et al. to Center for Healthcare Policy and Resource Development, Office of Primary Care and Health Systems Management, New York State Department of Health (Apr. 22, 2015), available at https://www.ftc. gov/system/files/documents/advocacy_documents/ftc-staff-comment-center-health-care-policy-resource-development-office-primary-care-health-systems/150422newyorkhealth.pdf; FTC Staff Submission to the Tenn. Dep’t of Health Regarding the Certificate of Pub. Advantage Application of Mountain States Health Alliance & Wellmont Health Sys. (Nov. 21, 2016), available at https://www. ftc.gov/system/files/documents/advocacy_documents/ftc-staff-submission-tennessee-department-health-regarding-certificate-public-advantage-application/161122wellmontcommenttenn.pdf.

^6. See, e.g., Press Release, Tenn. Dep’t of Health, Tennessee Grants Certificate of Public Advantage for Wellmont Health System, Mountain States Health Alliance (Sept. 19, 2017), available at https://www. tn.gov/assets/entities/health/attachments/COPA_PRESS_RELEASE_Announcement_91917. pdf; Press Release, FTC, FTC Dismisses Complaint Challenging Merger of Cabell Huntington Hospital and St. Mary’s Medical Center (July 6, 2016), available at https://www.ftc.gov/news-events/press-releases/2016/07/ftc-dismisses-complaint-challenging-merger-cabell-huntington (explaining the Commission vote to dismiss the complaint in light of West Virginia’s March 2016 passage of a law permitting certain "cooperative agreements" between hospitals within the state, the West Virginia Health Care Authority’s decision to approve a cooperative agreement between the hospitals, and the West Virginia Attorney General concurrence with that decision).

^7. In the matter of Evanston Northwestern Healthcare Corp. & ENH Med. Grp., Inc., FTC Docket No. 9315, available at https://www.ftc.gov/enforcement/cases-proceedings/0110234/evanston-northwestern-healthcare-corporation-enh-medical-group.

^8. FTC v. Penn State Hershey Med. Ctr., 838 F.3d 327 (3d Cir. 2016); FTC v. Advocate Health Care Network, 841 F.3d 460 (7th Cir. 2016).

^9. Penn State Hershey Med. Ctr., 838 F.3d at 347.

^10. See id. at 347-50; St. Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd., 778 F.3d 775, 791-92 (9th Cir. 2015) ("But even if we assume that the claimed efficiencies were merger-specific, the defense would nonetheless fail… the Clayton Act does not excuse mergers that lessen competition or create monopolies simply because the merged entity can improve its operations.").

^11. See Penn State Hershey Med. Ctr., 838 F.3d at 353.

^12. See, e.g., Edith Ramirez, Chairwoman, FTC, Keynote Address at Antitrust in Healthcare Conference in Arlington, VA (May 12, 2016), available at https://www.ftc.gov/system/files/documents/public_ statements/950143/160519antitrusthealthcarekeynote.pdf; Deborah L. Feinstein, Director, Bureau of Competition, FTC, Antitrust Enforcement in Healthcare: Proscription, no Prescription at the Fifth National Accountable Care Organizations Summit in Washington, D.C. (June 19, 2014), available at https://www.ftc.gov/system/files/documents/public_statements/409481/140619_aco_ speech.pdf.

^13. N. C. State Bd. of Dental Exam’rs v. F.T.C., 135 S. Ct. 1101 (2015).

^14. F.T.C. v. Phoebe Putney Health System Inc., 568 U.S. 216 (2013).

^15. N. C. State Board of Dental Exam’rs, 135 S. Ct. at 1110-11; Phoebe Putney, 133 S.Ct. at 1010.

^16. 568 U.S. at 226-36.

^17. Despite this major legal victory, Georgia’s Certificate of Need ("CON") laws made the subsequent divestiture order impossible to carry out. State CON laws typically require healthcare providers to obtain state approval before expanding, establishing new facilities or services or making certain large capital expenditures. Here, because the relevant region was deemed "over-bedded" by the Georgia Department of Community Health Hearing Officer, that finding effectively ensured that any prospective divestiture buyer would face a lengthy legal battle with an uncertain outcome. As a result, in March 2015, the FTC dropped its case after four years of litigation, without achieving any remedy.

^18. FTC Staff Guidance on Active Supervision of State Regulatory Boards Controlled by Market Participants (Oct. 2015), available at https://www.ftc.gov/system/files/attachments/competition-policy-guidance/active_supervision_of_state_boards.pdf.

^19. New York Consolidated Laws, Public Health Law – PBH § 2999-aa (emphasis added).

^20. Colorado, Florida, Georgia, Idaho, Iowa, Kansas, Minnesota, Montana, Nebraska, North Carolina, North Dakota, Ohio, Oregon, South Carolina, Tennessee, Texas, Washington, and Wyoming. Since then, several of those statutes, including Colorado, North Carolina, and North Dakota, have been repealed and several other states have enacted COPA laws, including in Alaska, Louisiana, Maine, Mississippi, New York, Virginia, West Virginia, and Wisconsin.

^21. Two studies were conducted regarding the Mission Health COPA. One, by the Urban Institute, found that there was no conclusive evidence whether the overall impact of the COPA had been positive or negative. R. R. Bovbjerg and R. A. Berenson, Certificates of Public Advantage: Can They Address Provider Market Power? (Feb. 2015), available at https://www.urban.org/sites/default/files/ publication/42226/2000111-Certificates-of-Public-Advantage.pdf. The other, an economic study commissioned by the state in 2011, recommended modifications of certain COPA conditions, but did not address broader questions of the impact of the COPA on publ ic health or physician incentives to practice in the Asheville NC region. G.S. Vistnes, An Economic Analysis of the Certificate of Public Advantage (COPA) Agreement Between the State of North Carolina and Mission Health (Feb. 10, 2011), available at https://mountainx.com/files/copareport.pdf.

^22. Press Release, FTC, FTC Staff Notice of COPA Assessment: Request for Emperical Research and Public Comments (Nov. 1, 2017), available at https://www.ftc.gov/system/files/attachments/ press-releases/ftc-staff-seeks-empirical-research-public-comments-regarding-impact-certificates-public-advantage/p181200_copa_assessment_comment_notice_11-1-17.pdf?utm_ source=govdelivery.

^23. W. Va. Code § 16-29B-28 (2017).

^24. See, e.g., FTC Staff Submission to the Tenn. Dep’t of Health Regarding the Certificate of Pub. Advantage Application of Mountain States Health Alliance & Wellmont Health Sys. (Nov. 21, 2016), available at https://www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-submission-tennessee-department-health-regarding-certificate-public-advantage-application/ 161122wellmontcommenttenn.pdf; Letter from Marina Lao, Director, FTC Office of Policy Planning, et al. to Hon. Larry C. Stutts, Alabama State Senator (May 2, 2016), available at https:// www.ftc.gov/system/files/documents/advocacy_documents/ftc-staff-comment-alabama-state-senate-regarding-alabama-house-bill-241-senate-bill-243/160504commentalabama.pdf; Letter from Marina Lao, Director, FTC Office of Policy Planning, et al. to Hon. Mike Pushkin, West Virginia Delegate (Mar. 9, 2016), available at https://www.ftc.gov/system/files/documents/ advocacy_documents/ftc-staff-comment-west-virginia-house-delegates-regarding-sb-597-competitive-implications-provisions/160310westvirginia.pdf; Letter from Marina Lao, Director, FTC Office of Policy Planning, et al. to Center for Healthcare Policy and Resource Development, Office of Primary Care and Health Systems Management, New York State Department of Health (Apr. 22, 2015), available at https://www.ftc.gov/system/files/documents/advocacy_documents/ ftc-staff-comment-center-health-care-policy-resource-development-office-primary-care-health-systems/150422newyorkhealth.pdf.

^25. See, e.g., Cory Capps & David Dranove, Hospital Consolidation and Negotiated PPO Prices, 23 Health Affs. 175, 179 (2004) ("most consolidating hospitals raise prices by more than the median price increase in their markets"); Leemore S. Dafny, Estimation and Identification of Merger Effects: An Application to Hospital Mergers 26 Nat’l Bureau of Econ. Research, Working Paper No. 11673 (2005) ("there is conclusive evidence that mergers of independent hospitals can lead to large increases in area prices"); Martin Gaynor & Robert Town, The Impact of Hospital Consolidation—Update, Technical Report (Robert Wood Johnson Foundation/The Synthesis Project, Princeton, N.J.) (June 2012), at 2 ("Hospital mergers in concentrated markets generally lead to significant price increases.").

^26. New York’s Delivery System Reform Incentive Payment (DSRIP) Program is the main mechanism by which New York State is implementing the Medicaid Redesign Team (MRT) Waiver Amendment. DSRIP’s purpose is to fundamentally restructure the healthcare delivery system by reinvesting in the Medicaid program, with the primary goal of reducing avoidable hospital use by 25% over 5 years. https://www.health.ny.gov/health_care/medicaid/redesign/dsrip/.

^27. See also Nat’l Collegiate Athletic Ass’n v. Bd. of Regents of Univ. of Okla, 468 U.S. 85, 134 (1984) (White, J., dissenting) ("The legitimate noneconomic goals of colleges and universities should not be ignored in analyzing restraints imposed by associations of such institutions on their members, and these noneconomic goals may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. The Court of Appeals, like the District Court, flatly refused to consider what it termed ‘noneconomic’ justifications advanced by the NCAA in support of the television plan. It was of the view that our decision in [National Society of Professional Engineers], precludes reliance on noneconomic factors in assessing the reasonableness of the television plan. This view was mistaken, and I note that the Court does not in so many words repeat this error.").

^28. http://www.tn.gov/assets/entities/health/attachments/Approval_Letter_granting_COPA.pdf

^29. Ballad Health Terms of Certification, available at https://www.tn.gov/assets/entities/ health/attachments/Ballad_Health_-_Terms_of_Certification_Governing_the_COPA_-_ September_18_2017_-_approved_by_MSHA_Board.pdf.

^30. See, e.g., Negotiating Merger Remedies, Statement of the FTC Bureau of Competition ( Jan. 2012), available at https://www.ftc.gov/system/files/attachments/negotiating-merger-remedies/merger-remediesstmt.pdf.

^31. FTC and DOJ, IMPROVING HEALTH CARE: A DOSE OF COMPETITION (2004), available at https://www.ftc.gov/sites/default/files/documents/reports/improving-health-care-dose-competition-report-federal-trade-commission-and-department-justice/040723healthcarerpt.pdf.

^32. Dissenting Statement of Commissioner Julie Brill on the Joint Statement of the Federal Trade Commission and the Antitrust Division of the U.S. Department of Justice on Certificate-of-Need Laws and South Carolina House Bill 3250 ( Jan. 8, 2016), available at https://www.ftc.gov/system/ files/documents/public_statements/905323/160111ftc-doj-sclaw-statement.pdf.