Federal judge rejects FTC request to stop Novant from buying 2 Charlotte area hospitals
A federal judge on Wednesday denied the Federal Trade Commission’s request for a preliminary injunction to stop Novant Health from buying two Lake Norman Hospitals for $320 million.
The agency said Novant Health would control a large share of the market with the deal and that could hurt consumers by wiping out competition, leave fewer options for patients and increase insurance rates.
The case began in late January when the FTC filed a lawsuit in the U.S. District Court for Western District of North Carolina. Novant wants to purchase Lake Norman Regional Medical Center in Mooresville and Davis Regional Medical Center, a behavioral health hospital in Statesville.
The FTC had filed for a preliminary injunction to stop the Winston-Salem health system from buying the hospitals. Both centers are owned by Community Health Systems, Inc., which is also a defendant.
But U.S. District Judge Kenneth Bell denied the FTC’s request for a preliminary injunction — which would have paused the deal between Novant and Community Health Systems.
“Overall, the public interest is best served by Novant being permitted to own and operate (Lake Norman Regional Medical Center) and (Davis Regional Medical Center), pending the conclusion of the FTC administrative process,” the order said.
The FTC declined to comment on the judge’s order.
Novant Health said the decision would benefit the communities served by the two hospitals. It allows Novant to move forward with purchasing the facilities and related businesses, including physician clinic operations and outpatient services from Community Health Systems.
Novant’s plan to deliver on commitments made for the Lake Norman and Davis areas begins now, said CEO Carl Armato in a news release.
“We’re eager to welcome the Lake Norman and Davis facilities into the Novant Health network,” Armato said.
Community Health Systems is pleased with the decision, said spokeswoman Tomi Galin. She said it confirms the validity of the company’s deal with Novant Health.
The parties previously made an agreement to stop the deal from being final until a court ruling was made on the injunction request.
About the FTC’s concerns over Novant
The FTC said the deal was unlawful in part because it would give a combined entity a 64% share of the market in the Eastern Lake Norman area, according to a court filing by the agency.
Novant Huntersville and Lake Norman are competitors that are 12 miles away, the FTC noted in the filing.
The FTC also stated that the Supreme Court said mergers are perceived as unlawful if a single group controls 30% of the market.
Novant’s growth, through a decades-long series of mergers, were also cited by the FTC in court filings. Novant has worked to take over six Carolina hospitals within the last year, the FTC said.
The FTC also noted rounds of layoffs and hundreds of job cuts at Novant.
More on Novant and Community Health Systems
Novant is one of the largest hospital systems in North Carolina and the Southeast, and operates more than 800 outpatient facilities and physician office in the Carolinas. Its total revenue was $7.6 billion in 2022, according to the complaint filed by the FTC.
Novant also is one of the two major health care systems in Charlotte, along with Atrium Health.
Tennessee-based Community Health Systems operates 71 hospitals and thousands of care sites across 15 states. Its annual revenue was $12.2 billion in 2022.
The two hospitals Novant wants to buy from CHS are the only ones in North Carolina.
This story was originally published June 5, 2024 at 4:51 PM.
