Ninth Circuit Denies Rehearing to St. Luke’s Health System

The Ninth Circuit will not reconsider its decision to force St. Luke’s Health System to unwind its purchase of Saltzer Medical Group, the largest physician practice group in the relevant Idaho market. The ruling leaves in place a victory for the Federal Trade Commission (FTC) in the merger row.

In February, the Ninth Circuit ruled in favor of the FTC, affirming a district court’s decision that St. Luke’s acquisition of the physician practice group violated federal antitrust laws. The Ninth Circuit agreed that the horizontal combination of primary care doctors could lead to anticompetitive effects in the market for primary care services. Post-merger, according to the court, St. Luke’s may have the market power to negotiate higher reimbursement rates from insurers.

St. Luke’s requested both a panel and an en banc rehearing of the decision, citing numerous key errors made by the Ninth Circuit in affirming the district court decision. Primarily, St. Luke’s argued that the court was wrong to ignore the health system’s efficiencies defense. St. Luke’s argued that the Ninth Circuit improperly ignored the fact that improved service and better quality are recognized as procompetitive benefits that could rebut the prima facie case of anticompetitive effects.

In a terse order, the Ninth Circuit denied St. Luke’s request for rehearing, stating laconically that the petition was denied and that no judge on the full court requested a vote on whether to rehear the matter en banc.

The last hope for St. Luke’s efficiencies defense is the Supreme Court of the United States, though St. Luke’s has not yet announced whether it will make that appeal.

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