Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS—D. Idaho.: Trustee appointed to oversee sale of Idaho physician practice, (Dec 14, 2015)

By Jeffrey May, J.D.

The process for unwinding the tie-up of St. Luke’s Health System, Ltd.—the largest health care system in Idaho—and Saltzer Medical Group—the state's largest independent, multi-specialty physician practice—has been outlined in an agreed order approved by the federal district court in Boise, Idaho. The divestiture of Saltzer was ordered in January 2014 to restore competition—lost as a result of the acquisition of Saltzer by St. Luke’s—in the market for adult primary care physician services sold to commercially insured patients in Nampa, Idaho. The acquisition was found to violate federal and state antitrust laws, in an action brought by competitors St. Alphonsus and Treasure Valley Hospital Limited Partnership, as well as the FTC and the State of Idaho (Saint Alphonsus Medical Center–Nampa, Inc. v. St. Luke’s Health System, Ltd., December 10, 2015, Winmill, B.).

The court has now appointed a trustee—the investment bank Cain Brothers—to accomplish the divestiture of the Saltzer assets within 12 months. The acquirer must be acceptable to the FTC and State of Idaho. If the sale is not completed in a year, the court might consider alternative measures to achieve the goal of its divestiture order.

Pending the sale, St. Luke's must maintain the economic viability and marketability of Saltzer. The order restricts the ability of either St. Luke's or Saltzer to sell assets or to enter into exclusive or long-term contracts. They also are prohibited from encouraging Saltzer physicians or other designated employees to seek employment at St. Luke’s. Even after the divestiture, for a five-year period, St. Luke’s is limited in its ability to employ or solicit certain Saltzer physicians.

The case is No. 1:14-cv-00475-BLW.

Attorneys: Brett T. DeLange, Office of Attorney General, for Saint Alphonsus Medical Center–Nampa, Inc., Saint Alphonsus Health System Inc., Saint Alphonsus Regional Medical Center, Inc., Treasure Valley Hospital Ltd. Partnership and State of Idaho. Douglas Eugene Litvack (Jones Day) for St. Luke's Health System, Ltd. and St. Luke's Regional Medical Center, Ltd. Brian K. Julian (Anderson Julian & Hull) for Saltzer Medical Group.

Companies: Saint Alphonsus Medical Center – Nampa, Inc.; Saint Alphonsus Health System Inc; Saint Alphonsus Regional Medical Center, Inc.; Treasure Valley Hospital Ltd. Partnership; State of Idaho; St. Luke's Health System, Ltd; St. Luke's Regional Medical Center, Ltd; Saltzer Medical Group

Cases: AcquisitionsMergers Antitrust IdahoNews FederalTradeCommissionNews