On December 13, 2017 a magistrate judge in the U.S. District Court for the District of North Dakota granted a request of the Federal Trade Commission (FTC) and North Dakota Attorney General to preliminarily enjoin Sanford Health from completing its proposed acquisition (via its subsidiary Sanford Bismarck) of Mid Dakota Clinic, P.C., a multispecialty physician practice located in and around the cities of Bismarck and Mandan, North Dakota (see our previous analysis of the FTC’s decision to intervene here).
After a four-day evidentiary hearing, during which the court received over 1600 exhibits and heard testimony from 16 witnesses, the court granted the request in a brief order that only addressed the parties’ substantive positions in passing. Interestingly, the order revealed that the defendants sought to undercut the FTC’s position by arguing that its determinations concerning the effects of the merger on competition did not sufficiently account for the impact of a powerful buyer of health care services in North Dakota: Blue Cross Blue Shield of North Dakota. Nonetheless, the court sided with the FTC and the North Dakota Attorney General in a decision that represents another success for the FTC in opposition to vertical integration between hospital systems and physician practices.
The FTC’s administrative hearing on this case had been scheduled to commence January 17, 2018, but on December 15, 2017 the defendants filed a notice of appeal of this preliminary injunction order to the U.S. Court of Appeals for the Eighth Circuit and subsequently requested a continuance of the administrative hearing while the appeal proceeds. As a result, it looks like the FTC’s recent success in opposing health care consolidation will again be challenged at the Circuit court level.