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Supreme Court reverses ruling on Georgia hospital acquisition

February 19, 2013

The U.S. Supreme Court today reversed a lower court decision allowing the Hospital Authority of Albany-Dougherty County, which owns Phoebe Putney Memorial Hospital in Albany, GA, to acquire a competing hospital under the state action doctrine, which provides an exemption from federal antitrust laws. Phoebe Putney Health System said in a statement, "We are disappointed because the lower court rulings were clear in the applicability of state action immunity in accordance with long-standing precedent. This does not alter our resolve or the commitment Phoebe has to meeting the growing needs of this community and the region we serve." The Federal Trade Commission had challenged the acquisition (Federal Trade Commission v. Phoebe Putney Health System), maintaining the state action doctrine did not apply. The Court agreed, finding that there was "no evidence the State affirmatively contemplated that hospital authorities would displace competition by consolidating hospital ownership." In a friend-of-the-court brief, AHA and the Georgia Hospital Association had urged the Court to consider the impact of its ruling on state hospital authorities, which are tasked "with ensuring that their communities have needed health care and a proper safety net."