Saturday, August 08, 2009
Carilion offers to sell centers named in complaint
The call for a settlement comes two weeks after the FTC said Carilion violated anti-trust laws.
Related
Document
- View the FTC's documents related to this case, including the recent joint motion to be temporarily removed from adjudication
- Read the FTC's original complaint (PDF, 1.38 MB)
Previous coverage
Under pressure from the Federal Trade Commission, Carilion Clinic has offered to sell two outpatient centers it paid $20 million for last year.
The offer comes two weeks after the FTC filed a complaint challenging Carilion's Aug. 28 purchase of the Center for Advanced Imaging and the Center for Surgical Excellence. The FTC said the purchase violated anti-trust laws and created a void in competition for outpatient imaging and surgical services in Roanoke that could ultimately raise the cost of health care.
In a joint motion filed by Carilion and the FTC, the two asked that the case be removed from adjudication for 30 days so a settlement can be reached. The settlement would include Carilion's offer to sell both centers to "a buyer approved by the Commission," according to documents filed with the motion.
Settlement talks with the commission cannot occur unless a case has been removed from adjudication. For that to happen, both the commission and the administrative law judge assigned to the case have to sign an order granting the motion.
The motion was filed Thursday and made public Friday morning.
Lawyers for the FTC and Carilion have proposed a consent agreement that would resolve the case. The consent agreement is not public at this time.
"Both sides think that we are at a place in our discussions where a settlement can be reached," said Jeff Perry, acting deputy assistant director of the Bureau of Competition for the FTC. "And I can say ... we will not enter into a consent agreement unless it will fully and completely restore the competition that was eliminated by the acquisition."
Both outpatient centers had been owned by Odyssey Imaging LLC and were marketed as low-cost, independent alternatives to Carilion.
After learning of the proposed motion, Marty Hellkamp, president of Odyssey, said his company would be interested in purchasing the two centers back from Carilion.
"We would be happy to entertain discussions with Carilion in efforts to re-establish competition in the valley," Hellkamp said.
Hellkamp said he has not been contacted by the FTC or Carilion about a deal.
It's unclear why Carilion has now offered to proceed with settlement negotiations. Often, settlement talks occur prior to a complaint being filed. Then, when a complaint is issued, a settlement also is issued on the same day.
But Perry said it is not without precedent for settlement discussions to take place after a complaint has been issued and that the FTC is willing to discuss settlement at any point during the process.
In response to a request to interview Carilion CEO Dr. Ed Murphy, Carilion spokesman Eric Earnhart said Carilion would not discuss the situation.
"The documents speak for themselves," Earnhart said. "Since the litigation is ongoing, we really can't say anything else."
The FTC complaint said the out-of-pocket costs for a brain scan will likely increase by nearly 900 percent if Carilion is allowed to continue to own and operate the imaging center. When the complaint was filed, Carilion said it was based on inaccurate information and that there were no plans to raise prices at either center.
In filing the motion to enter settlement talks, Carilion also filed a motion to extend its time to respond to the complaint by 30 days. Carilion was given two weeks to respond. The two weeks were up Friday.
Carilion, a nonprofit and Southwest Virginia's largest health care provider, was notified two days after it purchased the centers that the FTC was investigating the purchase. Carilion hired lawyers with Epstein Becker & Green, P.C., to represent the hospital at the beginning of the investigation.





