Physician Practice Acquisitions And Antitrust Scrutiny

By Bruce Sokler, Robert Kidwell, Farrah Short and Shawn Skolky (September 19, 2017, 10:14 AM EDT) -- After five years of growth through a series of acquisitions, the Washington state attorney general's office filed a lawsuit to thwart and unwind the most recent expansion efforts of Franciscan Health System (CHI Franciscan) for violating both federal and state antitrust laws. State of Washington v. Franciscan Health System, et al. No. 3:17-cv-05690 (W.D. Wash. Aug. 31, 2017). The AG's office seeks to unwind CHI Franciscan's 2016 acquisition of WestSound Orthopaedics PS for violation of Section 7 of the Clayton Act and the Washington Consumer Protection Act. The state also seeks to unwind multiple affiliation agreements from 2016 between The Doctors Clinic (TDC) and CHI Franciscan for alleged price fixing under Section 1 of the Sherman Act as well as the Washington Consumer Protection Act. In addition to unwinding the transactions, the state seeks equitable disgorgement from ill-gotten gains related to both transactions. The state alleges that through years of expansion via acquisition, CHI Franciscan has accumulated market share that has harmed competition, raised health care prices, and will continue to harm consumers on the Kitsap Peninsula and nearby Bainbridge and Fox Islands, with respect to both orthopedic physician services and adult primary care services....

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