Georgia's Phoebe Putney Health System, which has gone to the U.S. Supreme Court and back in its quest to buy a rival hospital for $200 million, lost a key legal battle last week when a federal judge imposed what he called an “extraordinary and drastic” restraining order on the union.
The Federal Trade Commission has waged a two-year legal battle against the health system, alleging that the acquisition of the former Palmyra Medical Center in Albany, Ga., illegally gave Phoebe Putney monopoly power over hospital care in a six-county region. The 102-bed Palmyra became Phoebe's fourth hospital in southwest Georgia in December 2011 when for-profit HCA sold it for $198 million.
U.S. District Judge W. Louis Sands granted a request for a temporary restraining order that prevents Phoebe from integrating its new hospital into the system, including changing existing healthcare prices with managed-care companies. The ruling does not prevent Phoebe from striking new contracts with insurers that contain new prices. The FTC has said Phoebe gave insurers such as Blue Cross and Blue Shield of Georgia “substantially” lower rates in exchange for agreements that the company would not contract with competitors such as Palmyra.