FTC challenges Carilion’s purchases of two clinics under anti-trust laws

Click here to read the full FTC complaint (PDF file, requires Adobe Acrobat Reader)

 

11:40 a.m.

The FTC takes on Carilion Clinic, and claiming your out-of-pocket health costs could soar because of two Carilion purchases.

The challenge is over Carilion’s purchase of two outpatient clinics in Roanoke: The Center for Advanced Imaging (CAI), and the Center for Surgical Excellence (CSE).

Essentially, the FTC’s argument is that the purchases eliminated vital competition in the Roanoke region.

The FTC’s administrative complaint under federal anti-trust laws alleges that Carilion’s purchase of the clinics “will lead to higher health care costs and reduced incentives to maintain and improve service and quality of care for patients in the Roanoke area.“ A headline on the FTC’s website claims patients’ out-of-pocket expenses for procedures would likely increase by nearly 900%.

The FTC justifies that number by arguing Carilion’s acquisition of CAI and CSE reduced the number of outpatient imaging services in the Roanoke area from three to two.  The FTC goes on to argue that the purchases also mean that Carilion now only faces competition for outpatient imaging and surgical services from HCA, the owner of Lewis Gale Medical Center in Salem.

The FTC wants Carilion to “divest” or sell both CAI and CSE, as well as related assets that would be necessary to restore competition in the market.

Carilion paid $20 million to buy CAI and CSE, according to the FTC complaint.

“The elimination of competition between Carilion and CAI and CSE will result in higher health care costs at a time when such costs already cause serious financial hardship for consumers in the Roanoke area and throughout the country,” FTC Bureau of Competition Director Richard Feinstein is quoted as saying in a news release.

In an e-mail response, Carilion spokesman Eric Earnhart told WSLS, “We (Carilion) are currently reviewing the FTC complaint and preparing our response.  We are concerned that the complaint appears to be based on inaccurate information. The Center for Advanced Imaging and Center for Surgical Excellence will continue to operate normally. There have been no changes in the Center’s prices since their purchase last year, and no changes are planned. We will remain focused on our mission to develop an integrated system that improves patient care and reduces health care costs.“