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LCMC Health sues US attorney general for halting $150 million sale of Tulane hospitals

por John R. Fischer, Senior Reporter | April 25, 2023
Business Affairs
LCMC Health has sued the U.S. Attorney General for halting its $150 million acquistion of three Tulane hospitals. (Photo of Tulane University Medical Center, courtesy of Tulane University School of Medicine)
LCMC Health, in Louisiana, is suing the U.S. Attorney General for allegedly violating federal law and Louisiana’s sovereignty by temporarily halting its $150 million acquisition of three Tulane hospitals from HCA Healthcare to review the sale.

The not-for-profit, nine-hospital system announced back in October 2022 that it would be taking over Tulane University Medical Center, Tulane Lakeside Hospital in Metairie, and Lakeview Regional Medical Center in Covington, as part of a partnership with Tulane University, with officials affirming in January that the deal had been finalized and integration to take place over the next 12 to 24 months,according to WDSU/Channel 6 News.

The Louisiana Attorney General issued a certificate of public advantage in December to protect the deal from federal antitrust scrutiny, reported Healthcare Dive.

But the Federal Trade Commission still told the healthcare provider to hold off and abide by a waiting period in accordance with the HSR Antitrust Act, which requires companies to file premerger notifications with the FTC and the Antitrust Division of the Justice Department for certain acquisitions, as well as pay a filing fee to the agency and a penalty fee that has been accruing since January 1 of $46,517 per day.

“Businesses that believe they can flout the law should be on notice: we will use the full scope of our authority to combat obstruction and to vindicate the FTC’s authority to investigate potentially illegal deals," said the FTC, which filed a suit of its own to stop the acquisition, in a statement.

LCMC Health says that the majority of Tulane’s Medical Center's services will be transferred over time to its East Jefferson General Hospital in Metairie and and University Medical Center New Orleans to support comprehensive, integrated care. Employees at all three Tulane University hospitals would continue to have jobs, as well as opportunities for advancement, with operations continuing as normal.

According to a survey that LCMC Health orchestrated, more than 70% of nearly 900 New Orleans residents approve of the deal, with 77% in favor of it increasing investments in care delivery, adding $1 billion to the state economy, and creating jobs. About 67% said they also liked the quality of care provided by local hospitals, and 72% said seeking out healthcare service in their community because of the deal was very or somewhat easy.

“Left unchecked, this agency overreach would not only offend important principles of federalism, but also harm the people of Louisiana who are well-served by the acquisition,” said LCMC Health in a request to the court to let the acquisition proceed.

LCMC Health will seek a declaratory judgment to affirm its partnership with Tulane University, saying that Louisiana’s approval makes federal antitrust law inapplicable in this case.

"It is troubling that ... the federal government is now trying to impose its will on an agreement that received tremendous support from the community,” said Louisiana Attorney General Jeff Landry in a statement.

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