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The Justice Department Monday announced it will require two hospitals in southern West Virginia to stop agreements that illegally divided the market for cancer and cardiac surgery. The move indicates that federal authorities are taking their scrutiny of anti-competitive behavior to even the smallest markets, especially in the healthcare industry but by implication in any industry where erstwhile competitors strike cooperative agreements. It also shows that federal regulators continue to pursue antitrust violations by hospitals, despite losing several cases against the hospital industry in recent years. The two hospitals, Bluefield Regional Medical Center Inc. and Princeton Community Hospital Association Inc., violated the Sherman Antitrust Act by agreeing privately between themselves which of them would provide what types of specialized care, according to spokesmen for the DOJ’s antitrust division. BRMC and PCH subsequently made joint filings with the state of West Virginia to request certificates of need, or CONs, for BRMC to provide cardiac-surgery services and for PCH to provide cancer services. A CON is a permit required to enter certain areas of the healthcare market; generally, the applicant must demonstrate to a state authority that there is an unmet need for its services. BRMC and PCH had been head-to-head competitors in cancer services and potential competitors in cardiac-surgery services. The complaint alleges that the agreements effectively allocated markets for cancer and cardiac-surgery services and restrained competition to the detriment of consumers. The agreements affected consumers in six West Virginia and three Virginia counties. In a lawsuit filed Monday in the U.S. District Court for the Southern District of West Virginia, the DOJ claimed the two hospitals decided that one of them would not seek state authorization to provide cardiac surgery while the other would decline to provide various cancer services, effectively restraining competition for the two services. “It is essential to maintain competition and choice in this important industry so that consumers will be provided with the best possible options for their healthcare needs,” said J. Bruce McDonald, deputy assistant attorney general in the department’s antitrust division. “The Sherman Act clearly prohibits hospitals and other competitors from engaging in this type of market allocation scheme.” Copyright �2005 TDD, LLC. All rights reserved.

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