Attorney General Jeff Landry is seeking to intervene in a federal lawsuit filed last week by LCMC Health over its purchase of three New Orleans area hospitals, arguing that the state of Louisiana's approval of the deal should be enough for it to move forward.
In court documents filed in U.S. District Court for the Eastern District of Louisiana, Landry’s office, which reviewed and approved LCMC's deal with Tulane University and HCA Healthcare in December, said that the transaction was not subject to federal oversight because Louisiana law gives state regulators authority to review and approve hospital consolidations.
The Federal Trade Commission told LCMC earlier this month that the New Orleans hospital operator should have sought the approval of federal regulators before executing the $150 million deal with HCA Healthcare.
LCMC responded by filing suit Thursday against the FTC, arguing that the approval via the state's “Certificate of Public Advantage,” or COPA, was the proper approval process.
“The FTC’s complete disregard towards Louisiana…is a blatant attack on Louisiana’s COPA law and Louisiana’s state sovereignty,” Landry’s office said in its legal filing.
La. Attorney General Jeff Landry, left, at a press conference on Tuesday, Feb. 7, 2023.
The filing by the attorney general's office sets up a potential legal fight between Landry, a Republican running for governor, and the Biden Administration's antitrust regulators. Already, legal analysts were watching the case closely as a test of federal power when it comes to hospital mergers.
The FTC has publicly stated its distaste for COPAs, which are allowed in 21 U.S. states, arguing that without close federal scrutiny, healthcare mergers negatively affect patient costs, patient care, and healthcare worker wages.
Tulane Medical Center is seen at 1415 Tulane Avenue in New Orleans on Monday, October 10, 2022. (Photo by Brett Duke, NOLA.com | The Times-Picayune | The New Orleans Advocate)
Landry's court filings argue its review of the LCMC deal shows “the merger will enhance competition, lead to greater access to healthcare result in higher quality health care and likely not result in undue increases to cost.”
The deal, which closed in January, give LCMC control of three Tulane-operated hospitals — Tulane University Medical Center downtown, Tulane Lakeside Hospital in Metairie and Lakeview Regional Medical Center in Covington. It leaves Ochsner Health and LCMC as the two health systems operating in the New Orleans area.
The legal battle over the hospital deal is rapidly escalating. One day after LCMC filed its suit against the FTC in a New Orleans federal court, the FTC filed a countersuit against LCMC in Washington D.C. federal court.
An order issued Friday by a federal judge in Washington D.C. said the Tulane hospitals now controlled by LCMC must remain open while the case proceeds.
