October 6, 2016

The FTC will require CentraCare Health, a healthcare provider in St. Cloud, Minnesota, to release some physicians from “non-compete” contract clauses, allowing them to join competing practices, under a settlement mitigating likely anticompetitive effects from CentraCare’s proposed merger with St. Cloud Medical Group. The FTC alleges that by eliminating SCMG as a potential alternative in the St. Cloud area, the acquisition is likely to increase CentraCare’s bargaining power vis-à-vis commercial health plans, allowing it to raise reimbursement rates and secure more favorable terms. The acquisition may also result in a loss of quality and service benefits to patients. The proposed consent order will permit the acquisition to proceed, but lessens its potential anticompetitive effects by requiring CentraCare to allow a number of adult primary care, pediatric, and OB/GYN physicians to leave the health system and work for other local providers or establish a new practice in the area and to provide certain financial incentives to a number of departing physicians. FTC

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