Physician Groups – The Next Enforcement Frontier for Healthcare Provider Mergers?

The Federal Trade Commission’s recent announcement that it will be undertaking a retrospective study of physician group consolidations may signal an increased focus on physician group mergers in the coming years. In this article, we explore how mergers involving physician groups pose unique issues and how the FTC’s approach to these transactions may be impacted by their forthcoming physician merger retrospectives. Physician mobility may have important implications regarding barriers to entry and repositioning. Physician mergers may also lead to non-standard remedies, such as the release of physicians from non-compete agreements. Vertical theories such as foreclosure of rivals through altered patient referral patterns or limited competitor access to physicians may also receive scrutiny in these types of transactions.

By Sara Razi, Steven Tenn & Omar Farooque¹

I. INTRODUCTION

Nearly 20 years ago, the Federal Trade Commission (“FTC”) set out to revitalize its hospital merger enforcement program. After the FTC and the U.S. Department of Justice (“DOJ”) lost a series of hospital merger litigations in the 1990’s, the FTC invested in its hospital merger enforcement program by starting a new group within its Bureau of Competition, the Merger Litigation Task Force (now known as Mergers IV).² Together with the FTC’s Bureau of Economics, they undertook a series of merger retrospectives to assess the competitive impact of consummated hospital mergers as a step