Lawmakers would let the restrictions on the monopoly end in 2028, but still allow it to block competitors for two more years.
Image: Johnson City Medical Center, a flagship hospital for Ballad Health, has received a rating of one star out of five from the Centers for Medicare & Medicaid Services. Image Credit: Brett Kelman/KFF Health News
***Note from The Tennessee Conservative – this article posted here for informational purposes only.
By Adam Friedman [Tennessee Lookout -CC BY-NC-ND 4.0] –
The U.S. Federal Trade Commission has warned Tennessee lawmakers that if they pass legislation allowing Ballad Health’s monopoly hospital agreement to end without allowing immediate competition, they risk driving up health care costs.
Tennessee lawmakers are contemplating passing legislation that formally ends Ballad’s Certificate of Public Advantage, COPA, agreement in 2028, removing restrictions on the 20-hospital chain in northeastern Tennessee and southwestern Virginia, and a second bill eliminating a law that allows hospitals to block competitors in their community in 2030 through a process called Certificate of Need, CON.
Three officials with the Federal Trade Commission, FTC, said this two-year period potentially “undermines” the state lawmakers’ goal of increasing competition.
“Ballad Health, for its part, would have ‘every incentive’ to oppose competitors applying for CONs, which would decrease the likelihood of entry,” said agency officials in a letter sent to Greenville Republican state Rep. David Hawk and published on the FTC website.
Ballad was formed after Tennessee and Virginia lawmakers waived antitrust regulations in 2018, allowing two regional hospital chains to merge. It created the largest state-sanctioned hospital monopoly in the nation, and in exchange, Ballad promised to meet several quality-of-care goals.
But an investigation by KFF Health News found the monopoly has also fallen short on many of its goals, including failing to meet benchmarks for infections, mortality, emergency room wait times, and patient satisfaction, according to annual reports from the Tennessee Department of Health and Ballad itself.
KFF also found that removing COPA laws can make hospitals more attractive to buyers. North Carolina repealed its COPA law in 2015, removing state oversight of an Asheville hospital chain. This meant the local monopoly remained, but none of the restrictions applied when a subsidiary of HCA Healthcare bought the system for $1.5 billion in 2019.
Hillary Edwards, a spokesperson for Ballad, said Ballad was deferring to the lawmakers to determine “policy going forward.”
The FTC opposed the Ballad monopoly agreement when it was passed by lawmakers, and has opposed COPAs nationwide. The agency has also opposed Tennessee’s CON law, which requires hospitals to receive state approval to open a new facility and allows competing hospitals to block the same facility if they can prove it will threaten their profitability.
Nonprofit hospital chains often use the CON process, arguing that if the state allows competitors into their most profitable procedures, such as heart surgeries and hip replacements, they will be forced to close emergency rooms. The hospitals claim they use those profits to offset the unpaid, legally required care they provide in their emergency rooms as hospitals of last resort for those uninsured.
In Ballad’s case, the COPA agreement also prevented it from opposing CON, but that would end in 2028, creating a two-year period before CON would go away.
FTC officials said in many ways the “worst possible outcome for patients.”
“The hospital evades antitrust scrutiny on the front end by virtue of the COPA, and then evades scrutiny by the state governments on the back end by virtue of the COPA’s expiration,” the officials said in their letter.
One Response
What a mess. Ballad is a pile of crooks.