Hospital transactions, including acquisitions and mergers, that meet Hart-Scott-Rodino (HSR) thresholds must, subject to any available exception, be reported to the Federal Trade Commission (FTC) and the Antitrust Division of the Department of Justice (DOJ). Additionally, parties to such a transaction must observe a mandatory 30-day waiting period before completing the transaction. The waiting period affords the federal antitrust agencies the opportunity to determine, before the transaction is completed, whether the transaction raises any significant competitive concerns.

The majority of reported transactions, including hospital transactions, do not raise significant competitive concerns, and are allowed to close after expiration of the initial waiting period. A small percentage of reported transactions, however, are “cleared” to either the FTC or DOJ for further investigation. If the reviewing agency needs additional information to assess the competitive impact of the transaction, it may issue a “second request” for information. Compliance with a second request generally entails, among other things, extensive production of documents, submission of written information, and witness depositions. Parties that have gone through the second request process know well how time consuming and expensive it is. Furthermore, the issuance of a second request has the effect of resetting the waiting period to 30 days after the parties have substantially complied with the second request.

Unfortunately, hospital transactions reported pursuant to HSR have seen a staggering increase in second requests. According to the agencies’ HSR Annual Report for Fiscal Year 2019 (covering the period from October 1, 2018–September 30, 2019), only 20% (a relatively high percentage compared to other industry groups) of hospital transactions cleared to one of the federal agencies for further review received a second request. However, according to the most recent annual report (HSR Annual Report for Fiscal Year 2020 covering October 1, 2019–September 30, 2020) released jointly by the federal agencies earlier this month, the percentage of hospital transactions cleared to one of the federal agencies for further review (all of which were cleared to the FTC) which were then subjected to a second request jumped to almost 55%.

* * *

For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte:

E. John Steren
Member of the Firm
Patricia Wagner
General Counsel / Chief Privacy Officer


Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.