Healthcare Business News

Supreme Court to hear cases on hospital deals, payment appeals

By Joe Carlson
Posted: September 25, 2012 - 5:15 pm ET

The U.S. Supreme Court has set hearing dates in November and December for three healthcare cases that will test the boundaries for acquisitions by public hospital authorities, Medicare payment appeals and settlements in wage-and-hour class-action lawsuits.

On Nov. 26, the justices will hear arguments in the case of FTC v. Phoebe Putney Health System. In that case, the Federal Trade Commission is seeking to unwind the $198 million acquisition of a formerly for-profit hospital in Albany, Ga., that was purchased by a public hospital authority that owns the only other competing hospital in the county.

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The legal questions presented are whether the Albany-Dougherty Hospital Authority has the same power as a state government to create monopolies, and if it has this "state action" power, whether that would shelter the deal from FTC scrutiny given that the authority's independent not-for-profit operator, Phoebe Putney Health Care, negotiated the actual purchase, the government says.

Twenty state governments have signed on to a friend-of-the-court brief supporting the FTC's position in that case, as have the National Federation of Independent Business and a group of 25 economics professors.

On Dec. 3, the high court will hear the case of Genesis Healthcare Corp. v. Symczyk, which asks whether a class-action lawsuit can remain active without its sole lead plaintiff. In that case, registered nurse Laura Symczyk sought $7,500 for lunch breaks during which she worked at Genesis HealthCare's Pennypack Center rehab hospital in Philadelphia, but the case was tossed out by a lower court after she didn't respond to an offer for full payment of damages before a class was certified. A court of appeals reversed that, saying the case still had potentially unresolved class-action plaintiffs.

On Dec. 4, the Supreme Court will hear the case of Sebelius v. Auburn Regional Medical, to consider whether 17 hospitals and Universal Health Services can appeal Medicare Disproportionate Share Hospital payments dating back more than a decade, based on the 2006 outcome of a separate lawsuit in which a judge ruled that the CMS incorrectly computed the DSH payments of other hospitals.

The full case schedule for the court's session beginning Nov. 26 is here (PDF).

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