The FTC’s final order in the Ascension-Amsurg deal is a preview of how the agency plans to police ASC consolidation, even when the numbers involved are small, according to an Aug. 31 client alert from global law firm Cooley.
On Aug. 25, the FTC finalized a consent order resolving antitrust concerns tied to Ascension Health Alliance’s $3.9 billion acquisition of Amsurg, requiring the health system to divest seven ASCs across five metro areas.
The order caps a process that began June 1, when the FTC filed a complaint alleging the deal would substantially lessen competition for certain outpatient surgical services, and June 2, when the agency announced the proposed divestiture terms. Six of the affected ASCs will go to Optum’s SC Affiliates; the seventh, in Panama City, Fla., will transfer to Florida Gastroenterology Center, a physician group that already held a minority stake.
The case lands as the FTC ramps up healthcare-specific enforcement. In March, FTC Chairman Andrew Ferguson directed the agency to form a Healthcare Task Force to pursue a “coordinated, integrated approach” to healthcare enforcement alongside HHS and the Justice Department.
According to the Cooley client alert, the Ascension-Amsurg order is an early look at what that coordination looks like in practice, and ASC operators eyeing acquisitions should take note of three things.
1. Deal size won’t protect from a service-line review.
The FTC did not object to the Ascension-Amsurg transaction overall. It objected to the overlap in specific outpatient surgical services, gastroenterology, ophthalmology and orthopedics, in five specific metros: Nashville, Tenn.; Panama City, Fla.; Tulsa, Okla.; Waco, Texas; and Wichita, Kan. A $3.9 billion deal cleared review everywhere else.
Cooley predicts that’s the model ASC operators should expect going forward. The agency is analyzing competition market by market and service by service, not at the level of the overall transaction. A modest local overlap in a single procedure type can be enough to trigger a complaint.
2. Ascension’s oversight didn’t end with the deal.
The order requires Ascension to give the FTC 30 days’ notice before acquiring any interest in an outpatient surgery center in the five affected metros, for the next 10 years, regardless of whether the deal would otherwise require a Hart-Scott-Rodino filing. That means future tuck-in acquisitions too small for standard antitrust review are still subject to FTC notice in those markets.
3. The FTC is following through, not just announcing priorities.
Daniel Guarnera, director of the FTC’s Bureau of Competition, said the divestitures would “help preserve a competitive market that will allow patients to get the care they need at a fair price.” Days before finalizing the order, the FTC also won a full trial blocking Henkel’s proposed acquisition of Liquid Nails, the first merger case litigated entirely in federal court under Mr. Ferguson’s stated preference for bypassing the agency’s in-house administrative process. Together, the two cases show an FTC willing to negotiate structural remedies like the Amsurg divestitures and litigate to a final result when a settlement isn’t available, according to the client alert.
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