New HampshireDepartment of JusticeOffice of the Attorney General

News Release

For Immediate Release
February 3, 2020

Contact:
Kate Spiner, Director of Communications
kate.spiner@doj.nh.gov | 603-573-6103

Charitable Trusts Unit and Consumer Protection and Antitrust Bureau Release Report, Letter Regarding Acquisition of Frisbie Memorial Hospital By FMH Health Services, LLC

Concord, NH – New Hampshire Attorney General Gordon J. MacDonald announces that the New Hampshire Department of Justice Charitable Trusts Unit and Consumer Protection and Antitrust Bureau have each completed their respective reviews of the proposed acquisition of Frisbie Memorial Hospital (Frisbie) in Rochester, New Hampshire by the Hospital Corporation of America (HCA) through a subsidiary, FMH Health Services, LLC (FMH). The Attorney General will take no action to oppose the proposed transaction at this time.

Frisbie is an acute-care community hospital with 88 beds. It provides inpatient and outpatient services to over 100,000 people in the Seacoast region. It is a nonprofit health care charitable trust organized under New Hampshire law. HCA is a for profit corporation based in Nashville, Tennessee. It owns 185 hospitals in 21 states and the United Kingdom. In New Hampshire, HCA owns Portsmouth Regional Hospital, a 220-bed hospital with a Level II trauma center located in Portsmouth, New Hampshire as well as Parkland Medical Center located in Derry, New Hampshire.

Charitable Trusts Review

The Charitable Trusts Unit is required to review acquisition transactions involving nonprofit hospitals in accordance with RSA 7:19-b. The Charitable Trusts Unit received the Notice of Proposed Transaction to Sell Charitable Assets of Frisbie Memorial Hospital to FMH Health Services, LLC, a subsidiary of HCA Healthcare, Inc., on October 23, 2019.

The review included extensive documentation, community and stakeholder input, as well as expert opinions regarding the transaction. The Charitable Trusts Unit conducted a public hearing on January 6, 2020, in Rochester. The Charitable Trusts Unit's decision to take no action is subject to 21 separate conditions. The bases for its decision and the imposition of conditions are outlined in detail in the report of the Director of Charitable Trusts.

As the report notes, approval by the New Hampshire Circuit Court, Probate Division will be required before the parties will be able to close the transaction. A hearing is scheduled at 1:00 p.m. on Wednesday, February 5, 2020, at the Probate Division in Dover.

Consumer Protection and Antitrust Review

In a separate review, the Consumer Protection and Antitrust Bureau performed a pre-transaction antitrust review to analyze the potential impact that the proposed transaction may have on the competitive landscape. The review took place pursuant to the Attorney General's authority under RSA Chapter 358-A, the Consumer Protection Act, RSA Chapter 356, the Combinations and Monopolies Act, and related federal law.

The Bureau reviewed the proposed transaction under uniform and established state and federal legal standards and antitrust guidelines. These are the same standards and guidelines used by the Bureau with respect to other transactions involving health care systems. This includes a detailed review of how the proposed transaction may affect competition in the relevant geographic and product markets. The review consisted of evaluating materials submitted by the parties, along with information independently obtained by the Office.

This review established that while the proposed transaction is not competitively neutral, its potential impact on competition as analyzed does not warrant formal action at this time. Some relevant factors supporting this conclusion include the following: first, although Frisbie and Portsmouth Regional Hospital are less than thirty miles apart, each hospital primarily draws from a different patient base; second, Frisbie employs a relatively modest number of physicians in the Seacoast region and, comparatively, HCA employs a smaller number of physicians than Frisbie; and, third, this transaction, if completed, could make it more likely that Frisbie will be competitive with hospitals that are in the region, thereby helping to maintain and foster competition in the region.

Based on these and other relevant factors, the Bureau will take no formal action at this time to challenge the proposed transaction as violating consumer protection and antitrust laws. Robust competition in the delivery of health care services is essential to keeping costs low and quality of care high. State law has several provisions that help facilitate competition in the health care market. The Bureau expects that, post-closing, the combined system will comply with all applicable laws intended to facilitate competition.

The Attorney General's Office will vigorously use its authority to ensure that competition is protected in the health care marketplace for the benefit of consumers. The Office reserves the right to take action authorized under law to address and remedy anticompetitive conduct and harm to consumers that may arise in the future.

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New Hampshire Department of Justice
33 Capitol Street | Concord, NH | 03301
Telephone: 603-271-3658