Commonwealth v. Partners Healthcare Sys. Inc. (Summary)

ACQUISITION

Commonwealth v. Partners Healthcare Sys. Inc., No. SUCV2014-02033-BLS2 (Mass. Super. Ct. Jan. 30, 2015)

The Superior Court of Massachusetts enjoined a healthcare provider system from acquiring two smaller healthcare provider systems, holding that the acquisition was not in the public’s interest. Acquirer was the largest health care provider system in the state with ten hospitals, a homecare agency, a network of rehabilitation facilities, and annual revenues of approximately $9 billion. Acquirees were two of the acquirer’s biggest geographic competitors. The three parties agreed on acquisition terms and announced their deal. The state’s attorney general investigated the deal for anticompetitive practices and discovered multiple issues. The healthcare provider systems negotiated with the attorney general and created a proposed acquisition agreement. The parties sought the court’s approval of the agreement.

The court rejected the proposed acquisition agreement. The proposed acquisition agreement called for temporary price caps to protect consumers from anticompetitive conduct by the acquirer. The court rejected the price caps because they were limited in time, failed to address the monopolization of the market, and are easy to circumvent. Additionally, the proposed acquisition agreement contains ten different areas of potential disagreement that the parties can petition the court to resolve. The court explained that the healthcare industry is highly complex and currently changing, thus it is ill-suited to handle the parties’ ongoing technical issues.