Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Grants Final Approval to Consent Order Resolving Challenge to Acquisition of Behavioral Health Facilities, (Nov 30, 2012)

By Jeffrey May, J.D.

The FTC has approved a final consent order resolving antitrust concerns over a proposed acquisition by one of the largest hospital management companies in the country of nine behavioral health facilities in western states. The agency announced on November 30 that it had issued a final consent order permitting Universal Health Corporation, Inc.’s (UHS) proposed $517 million acquisition of Ascend Health Corporation (In the Matter of Alan B. Mille and Universal Health Services, Inc., Dkt. No. C-4372, FTC File No. 121 0157, November 27, 2012).

The consent order required UHS to divest, within six months of the issuance of the final consent order, its Peak Behavioral Health Services facility (an acute inpatient psychiatric facility) and all relevant assets and real property in the local market encompassing El Paso, Texas and its suburb, Santa Teresa, New Mexico, to an FTC-approved buyer. To ensure that the Peak assets are able to attract a buyer that can effectively compete with UHS after the sale, the consent order allows the Commission to require a second UHS hospital—Mesilla Valley Hospital in Las Cruces, New Mexico—to be sold together with Peak if Peak alone is not divested to an approved buyer within six months.

The consent order settled FTC charges that the transaction, as originally proposed, would likely have caused anticompetitive harm by allowing UHS to raise the reimbursement rates it negotiates with commercial insurance plans for acute inpatient psychiatric services. The deal allegedly would have led to a virtual monopoly in the provision of acute inpatient psychiatric services to commercially insured patients in the El Paso/Santa Teresa area. Ascend owned or operated nine behavioral health facilities in Arizona, Oregon, Texas, Utah, and Washington State, including seven acute inpatient psychiatric hospitals, a substance abuse residential treatment center, and an addiction treatment center.

The FTC issued its Complaintand an Order To Hold Separate and Maintain Assets on October 5. At the same time, the agency announced the settlement conditionally allowing the transaction.

UHS announced on October 10 that it had completed its acquisition of Ascend, including the Ascend facility in El Paso. As a result of the acquisition of Ascend's assets and an unrelated sale of an acute care facility located in Auburn, Washington, UHS now owns or operates 197 behavioral healthcare facilities and 24 acute care hospitals in 37 states, Washington, D.C., Puerto Rico, and the U.S. Virgin Islands, according to the company.

News: Antitrust FederalTradeCommissionNews