The Federal Trade Commission has issued an administrative complaint to challenge Virginia-based Carilion Clinic's 2008 acquisition of two outpatient clinics in Roanoke, Va., stating that the acquisition eliminated Carilion's competition in the area, resulting in higher healthcare costs, according to an FTC news release.
The complaint states that Carilion's acquisition of the Center for Advanced Imagining and the Center for Surgical Excellence is in violation of federal antitrust laws and may increase out-of-pocket payments for patients using these services by as much as 900 percent. Prior to the acquisition, CAI and CSE had strong reputations for offering high-quality care at prices much lower than Carilion's, according to the release. The complaint represents an increased vigilance from the federal government as to healthcare combinations at exactly the same time that there is an increased desire by providers to examine strategic alliances and combinations for a variety of reasons.
Carilion's $20 million acquisition of CAI and CSE reduced the outpatient imaging and surgery providers in the area from three to two, leaving only HCA in competition with Carilion.
The complaint by the FTC signals possible increased difficulties for physician practices and holdings, such as imaging and surgery centers, when selling to healthcare chains or providers that already have a strong presence in their market.
The FTC wants Carilion to sell both CAI and CSE, as well as related assets to restore competition in the market. The FTC's vote to issue the administrative complaint was 4-0. A hearing is scheduled for Mar. 23, 2010.
The complaint states that Carilion's acquisition of the Center for Advanced Imagining and the Center for Surgical Excellence is in violation of federal antitrust laws and may increase out-of-pocket payments for patients using these services by as much as 900 percent. Prior to the acquisition, CAI and CSE had strong reputations for offering high-quality care at prices much lower than Carilion's, according to the release. The complaint represents an increased vigilance from the federal government as to healthcare combinations at exactly the same time that there is an increased desire by providers to examine strategic alliances and combinations for a variety of reasons.
Carilion's $20 million acquisition of CAI and CSE reduced the outpatient imaging and surgery providers in the area from three to two, leaving only HCA in competition with Carilion.
The complaint by the FTC signals possible increased difficulties for physician practices and holdings, such as imaging and surgery centers, when selling to healthcare chains or providers that already have a strong presence in their market.
The FTC wants Carilion to sell both CAI and CSE, as well as related assets to restore competition in the market. The FTC's vote to issue the administrative complaint was 4-0. A hearing is scheduled for Mar. 23, 2010.
Read the release about the FTC's challenge to Carilion's outpatient services acquisition.