The Federal Trade Commission has given Tennessee lawmakers a bill that if they pass legislation allowing Johnson City-based Ballad Health’s monopoly hospital agreement to end without allowing immediate competition, they risk driving up healthcare costs, Tennessee Lookout reported April 6.
Lawmakers are evaluating a bill that would formally end the systems’ Certificate of Public Advantage agreement in 2028, removing restrictions on the systems mergers and acquisitions, while also repealing the state’s certificate-of-need law.
Three officials with the FTC told the publication that this two-year period potentially “undermines” legislators’ goals of increasing competition in the state.
“Ballad Health, for its part, would have ‘every incentive’ to oppose competitors applying for CONs, which would decrease the likelihood of entry,” said agency officials in a letter sent to Representative David Hawk, a Republican from Greenville, and published on the FTC website.
The health system was formed in 2018 after Tennessee and Virginia waived antitrust regulations, creating the largest state-sanctioned hospital monopoly in the nation.
However, a recent investigation by KFF Health News found that monopoly has fallen short on many quality-of-care goals. It also found that removing COPA laws can make hospitals more likely to be purchased.
Ballad’s COPA agreement prevents it from opposing new CON applications in the state, but that would end if the bill is signed into law, creating a two-year period before CON would go away.
“The hospital evades antitrust scrutiny on the front end by virtue of the COPA, and then evades scrutiny by the state governments on the back end by virtue of the COPA’s expiration,” FTC officials said in their letter.
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