Appeals court grants FTC request to stop hospital merger pending administrative trial

Reversing a district court ruling, the U.S. Court of Appeals for the 3rd Circuit today granted a request by the Federal Trade Commission to prevent the integration of Milton S. Hershey Medical Center and PinnacleHealth while the agency completes an administrative trial challenging the proposed merger. According to the Appeals Court decision, the District Court erred in refusing the original request by the FTC for a preliminary injunction by using only patient inflows and ignoring patient outflows in determining the relevant geographic market; failing to properly account for the likely response of insurers in the face of a significant non-transitory increase in price in the market; and resting part of its relevant geographic market analysis on private agreements between the merging hospitals and the payers. “We are disappointed by the Court’s ruling,” Hershey and PinnacleHealth said in a statement. “Over the next several days the leadership and respective boards of both organizations will carefully review the decision, and together we will determine our next course of action.”