A federal appeals court that ruled against St. Luke's Health System's acquisition of a physician group should waste no time in lifting its stay on a lower court's order for St. Luke's to divest the group, plaintiffs in the case argued this week.
“It's high time to undo this anticompetitive and unlawful acquisition, which the Court has now recognized poses significant threats to competition,” argued the plaintiffs in a court filing Wednesday. Plaintiffs in the case include the Federal Trade Commission, the state of Idaho and St. Luke's competitors' St. Alphonsus Health System and Treasure Valley Hospital.
The plaintiffs want the court to formally send its decision to the lower court within a month.
St. Luke's spokeswoman Beth Toal said Friday the system believes it is “premature” to lift the stay given that “neither court found any current or imminent harm to competition … but only predicted that such harm may occur at some future time.”
“We intend to ask the Court to leave the stay in place while we make decisions about our next steps in this case,” Toal said in an e-mail. “Included in those next steps is a sound plan for divestiture that both meets the Court's expectations and minimizes disruption to Saltzer Medical group and their patients.”
According to the court filing, the plaintiffs conferred with St. Luke's about their request. St. Luke's and the physician group it acquired, Saltzer Medical Group, “refuse to agree to any fixed date by which the stay would be dissolved or the mandate would issue, though they were willing to discuss a shortening of the time period by which a rehearing petition would be filed,” the filing said.
“This is inadequate to satisfy Appellees' concern or the public interest, since it would still maintain a stay and delay divestiture until all rehearing proceedings were concluded, likely several more months away,” according to the filing.
St. Luke's might oppose lifting the stay if it plans to challenge the appeals court's ruling, said Mitchell Raup, a shareholder and healthcare antitrust lawyer with Polsinelli. It might want to keep a stay in effect, for example, if it plans to ask the appeals court to rehear the case en banc, or before a full panel of judges, as opposed to the three who decided the case.
Or St. Luke's might want to appeal the ruling to the U.S. Supreme Court. But stays aren't typically kept in effect when cases are appealed to the Supreme Court because the court hears so few of the cases that approach it, Raup said.
It's also possible, however, that St. Luke's will go ahead and divest Saltzer, rather than seek a rehearing or take the case to the Supreme Court.
Hospitals across the country have been watching the case closely because it was the first litigation over an FTC case against a physician practice deal. The case comes as providers are increasingly interested in consolidation to improve coordination of care and lower costs.
St. Luke's had argued that the acquisition would help it improve care for the communities it serves, but the plaintiffs said it would lead to higher prices for health plans and consumers.
The 9th U.S. Circuit Court of Appeals in Portland, Ore., ruled earlier this month that it wasn't enough for St. Luke's to say the deal would improve care. St. Luke's failed to show the deal wouldn't hurt competition, the court said.
Follow Lisa Schencker on Twitter: @lschencker
