The Supreme Court on Tuesday strengthened the power of the Federal Trade Commission to block hospital mergers, issuing an opinion that could limit the ability of public hospital authorities to claim immunity from federal antitrust laws.
The unanimous decision restored the authority of the F.T.C. to challenge the merger of the only two hospitals in Albany, Ga.
Some experts said the decision could mean that hospitals will have to be more cognizant of antitrust considerations when they join forces with other health care providers to form so-called accountable care organizations, as called for in the new health care law.
“I think this is going to limit one of the lines of defense that the A.C.O.’s will have,” said David Dranove, professor of health industry management at the Kellogg School of Management at Northwestern University.
Various hospitals are merging now, often arguing that combining broadens the range of services and makes them more efficient. But consolidation can also increase the hospitals’ leverage with insurance companies, leading to higher prices.
In the Georgia case, the F.T.C. had tried to block the acquisition of HCA Holdings’ Palmyra Medical Center by Phoebe Putney Memorial Hospital, which is owned by the Hospital Authority of Albany-Dougherty County.
States are generally exempt from federal antitrust laws, and that immunity can extend to local governments. Both the Federal District Court in Georgia and the Court of Appeals for the 11th Circuit ruled that the Albany deal was exempt because it was under the auspices of the county hospital authority.
But the Supreme Court said that local governments qualify for antitrust immunity only when they are acting pursuant to a clearly articulated state policy to limit competition. And that was not the case in Georgia.
“We hold that Georgia has not clearly articulated and affirmatively expressed a policy to allow hospital authorities to make acquisitions that substantially lessen competition,” Justice Sonia Sotomayor wrote for the court.
Jon Leibowitz, the F.T.C. chief, called the decision a “big victory for consumers who want to see lower health care costs.”
The hospitals consummated the merger after the appeals court ruling in their favor in 2011, but the F.T.C. might now try to undo it. The case is expected to return to the lower court. The federal agency might ask for an injunction to halt further integration of the hospitals while a separate proceeding determines whether the merger would indeed violate antitrust laws.
Barbara Eyman, general counsel for the National Association of Public Hospitals and Health Systems, said the decision would “make it harder for public hospitals, at least the public hospitals in Georgia, to achieve their mission.”
Ms. Eyman, whose organization filed a brief on the side of the Georgia hospitals, said that nonprofit hospitals providing charity care should not be subject to the same antitrust restrictions as profit-making hospitals.
She and other lawyers said that not many hospital mergers would fit the circumstances of the Supreme Court case.
“To my knowledge there aren’t a lot of cases pending waiting for this decision,” said Jay Levine, an antitrust partner with Bradley Arant Boult Cummings in Washington, who was not involved in the case.
Matthew Cantor, an antitrust lawyer at Constantine Cannon in New York, said that the degree to which accountable care organizations could be subject to antitrust scrutiny would depend on each state’s law. New York State’s law, for instance, explicitly says that accountable care organizations are beneficial, which could provide some protection from antitrust scrutiny, he said.
Mr. Cantor said the Supreme Court opinion “demonstrates that the pendulum has swung a bit back toward favoring antitrust laws over federalist concepts.”