Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC Issues Final Order Requiring Health Care Provider to Release Cardiologists from Non-Compete Agreements , (Dec 5, 2012)

By Jeffrey May, J.D.

The FTC announced on December 4 that it had approved as final a consent order requiring the largest provider of acute care hospital services in northern Nevada to release its staff cardiologists from non-compete contract clauses in order to resolve antitrust concerns over its acquisitions of two local cardiology groups. The consent order resolved allegations in a complaint, issued in August, that Renown Health’s acquisition of two cardiology groups in Reno, Nevada—Sierra Nevada Cardiology Associates, Inc. (SNCA) and Reno Heart Physicians, Inc. (RHP)—was likely anticompetitive (In the Matter of Renown Health, Dkt. C-4366, FTC File No. 111 0101).

According to the FTC, in late 2010, Renown Health agreed to acquire SNCA's medical practice and hire its 15 cardiologists practicing in the Reno area. Before this, Renown Health did not employ any cardiologists, and the acquisition positioned it as a direct competitor of RHP. In March 2011, Renown Health acquired RHP and hired its 16 Reno-area cardiologists. Prior to the transactions at issue, SNCA and RHP were the two largest groups of physicians providing adult cardiology services in the Reno area, it was alleged. Other than the physicians associated with SNCA and RHP, there were very few cardiologists practicing in the Reno area. Accordingly, the FTC alleged, competition for adult cardiology services was effectively eliminated by the transactions.

The contracts between Renown Health and the newly hired cardiologists included “non-compete” provisions, which effectively prevented them from joining medical practices that competed with Renown Health. As a result of the acquisitions and non-compete clauses, the FTC contended, Renown Health employed 88 percent of the cardiologists in the Reno area. Under the consent order, up to 10 of the cardiologists will be permitted to join competing cardiology practices in the Reno area.

The State of Nevada, through its Attorney General, worked with FTC staff to investigate the matter. The Attorney General filed a complaint, challenging the transactions, and entered into a separate consent decree with Renown Health (2012-2 Trade Cases ¶78,005), which was approved by the federal district court in Nevada in August.

News: Antitrust FederalTradeCommissionNews