After the Federal Trade Commission's approach to hospital mergers was called into question by a series of stinging defeats, two circuit courts have now given ringing endorsements of the agency's enforcement methodology, fortifying the FTC in its efforts to take on the increasingly consolidated industry.

According to Leslie E. John, who heads the antitrust practice group at Ballard Spahr LLP, hospitals now will have a stronger case before the FTC and the courts to the extent they can apply the geographic market methodologies discussed by the Third and Seventh circuits and demonstrate that under those approaches the merger at issue survives scrutiny.

"That is going to be a key part of the analysis," John said. "I think that it would be very difficult to rely on methodologies that both the Third Circuit and Seventh Circuit have found do not correctly

model economic realities."

However, that doesn't mean there's no opportunity for providers to push back on the FTC's conception of geographic markets in hospital merger cases, John said. While courts may have embraced the agency's narrow markets, they could be compelled to change their minds as analysis of the market evolves.

"As with all antitrust law, the given economic analysis does change over time," John said. "We've certainly seen approaches that were widely used in the past discredited. That doesn't rule out the fact that in the future, the pendulum will swing again."

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