FTC aims to unwind Phoebe Putney deal in Georgia

The Federal Trade Commission has withdrawn its agreement resolving a high-profile antitrust dispute with Phoebe Putney Health System. The commission will instead pursue its earlier ambition to unwind a hospital deal that it argued all the way to the U.S. Supreme Court created an illegal monopoly in Albany, Ga.

Last year, the FTC accepted a proposed consent agreement that would have allowed Phoebe Putney to keep Palmyra Medical Center, now named Phoebe North Campus in Albany, under certain conditions. For example, Phoebe Putney would have to notify the feds every time it wanted to buy another facility or physician practice for the next decade.

The FTC challenged the not-for-profit health system's $200 million acquisition of Palmyra from HCA for several years on the grounds it gave Phoebe Putney a monopoly in Albany and would lead to higher prices. The government won its case in the Supreme Court in 2013, reversing an appellate court ruling that said Phoebe Putney and its parent hospital authority were exempt from federal antitrust review.

Both sides agreed to the consent order last summer after the FTC concluded Georgia's certificate-of-need laws precluded Phoebe Putney from divesting Palmyra. However, according to documents released this month, Georgia's CON laws may not be an impediment.

The proposed deal allowed for a 30-day public comment period. The FTC ultimately learned that splitting up Phoebe North from the health system with a separate hospital license would not require CON review and approval as previously thought. In addition, the FTC found out there may be a new potential buyer for Phoebe North.

The case now moves to an administrative court, with the initial hearing set for Feb. 4, 2015.

Follow Bob Herman on Twitter: @MHbherman