New Orleans-based LCMC Health filed a lawsuit Wednesday asking a federal court to allow its planned $150 million purchase of three Tulane University Medical Center system hospitals to proceed, according to a statement from the hospital system.
LCMC Health in October said it planned to acquire Tulane University Medical Center, Tulane Lakeside Hospital and Lakeview Regional Medical Center from HCA Healthcare, as part of a larger partnership with Tulane University to provide healthcare services in southeast Louisiana.
Two months later, in December, the Louisiana attorney general issued a certificate of public advantage, or COPA, for LMCM’s acquisition, after a public comment period and hearing on the acquisition, according to the lawsuit. COPAs effectively shield acquisitions from federal antitrust oversight in exchange for prolonged state oversight, but the Federal Trade Commission has asked states to avoid using COPAs for hospital mergers.
Despite the COPA, the FTC ordered LCMC to halt the sale in order to observe a waiting period under the HSR Antitrust Act, and pay a filing fee to the agency, in addition to a penalty fee that amounts to $46,517 per day and has been accruing since Jan. 1, according to the lawsuit.
“The FTC’s actions constitute a significant violation of federal law and Louisiana’s sovereignty,” plaintiffs argued in the lawsuit. “Left unchecked, this agency overreach would not only offend important principles of federalism, but also harm the people of Louisiana who are well-served by the Acquisition — as Louisiana itself concluded when it issued a COPA to approve the transaction.”
LCMC Health said it is seeking a declaratory judgment affirming that its partnership with Tulane University is not subject to the federal antitrust regulatory review process because Louisiana has given approval to the transaction, which immunizes the deal from federal antitrust law.
“We are on solid ground and Louisiana knows what is best for our community. We are steadfast in our commitment to delivering health, care, and education beyond extraordinary for all, and continuing to deliver the benefits of the partnership for our patients and community,” LCMC said.
The LCMC lawsuit names the FTC, U.S. Attorney General Merrick Garland and the U.S. Department of Justice as defendants.
Louisiana Attorney General Jeff Landry, in a statement, said LCMC and Tulane exceeded the statutory burden of proof required to allow the deal to go through. “The merger will enhance competition, lead to greater access to health care, result in higher quality health care, and will likely not result in undue increases to costs,” Landry said.