HealthSouth Corp. is taking advantage of a relaxation in federal antitrust rules to gain flexibility in several key Southern markets.The Federal Trade Commission announced this month that HealthSouth is no long er obligated to obtain FTC approval before merging any of its rehabilitation hospitals in Birmingham, Ala., where the company has its headquarters, as well as in Charleston, S.C., and Nashville, Tenn. The decision came in response to HealthSouth's petition to modify a consent order that settled charges that its $180 million merger with ReLife, another Birmingham, Ala.-based rehabilitation provider, would violate antitrust laws and could raise prices or reduc e services at rehabilitation hospitals in those three cities. In its petition, HealthSouth requested that the FTC delete a provision in the agreement that required the company to receive prior approval from the commission before en tering any additional mergers or joint ventures in these markets. It also asked that it only be required to notify the FTC, rather than gain the agency's approval in advance of a deal. The FTC opened the door to such requests when it announced in June 1995 that it would no longer require companies that are subject to its consent agreements to seek its prior approval for other proposed transactions in the same market. The commission not only relaxed its polic y regarding future cases but also said companies with prior-approval requirements in their consent agreements could petition to have them removed.Before the policy change, the commission typically imposed a 10-year prior-approval r equirement on companies that settled disputes.The prior-approval requirement was intended to give the FTC a chance to scrutinize mergers and acquisitions involving companies that had previously misbehaved in a certain market.But th e commission said it wanted to end this practice because the prior-approval requirements duplicated other rules and were too burdensome and costly for companies to meet. Bill Horton, a senior vice president and corporate counsel fo r HealthSouth, said the company filed a standard petition requesting changes that reflect the agency's own policy shift. "We're trying to take the opportunity to take whatever favors the government is willing to do," he said. Hor ton said HealthSouth does not have any current actions planned in the three cities. However, he noted, "there may be an opportunity in one of these markets at some point in the future and this will give us a little more flexibilit y." The advantage of prior notification, he said, is that "we don't have to wait to proceed."
FTC RELAXES ANTITRUST RULES FOR HEALTH SOUTH
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.