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Vasilios J. Kalogredis, left, and Rachel E. Lusk Klebanoff, right, of Lamb McErlane. Vasilios J. Kalogredis, left, and Rachel E. Lusk Klebanoff, right, of Lamb McErlane.

On March 3, the U.S. Department of Justice (DOJ) announced that it had reached a settlement with Geisinger Health (Geisinger) and Evangelical Community Hospital (Evangelical) that would resolve the DOJ’s ongoing civil antitrust litigation challenging Geisinger’s “partial acquisition” of Evangelical. Among other terms, the settlement requires Geisinger to cap its ownership interest in Evangelical at a 7.5% passive interest and eliminates additional entanglements between the two competing hospitals.

Last August, the DOJ’s Antitrust Division filed a civil antitrust lawsuit challenging Geisinger’s partial acquisition of Evangelical after the hospitals finalized an agreement to partner in 2019. The DOJ alleged that Geisinger and Evangelical are close competitors for inpatient general acute-care (GAC) hospital services for patients in a six-county area in central Pennsylvania, where the two hospital systems together account for approximately 70% of the market. According to the complaint, the partial-acquisition agreement created significant entanglements between the hospitals, reducing their incentives to compete against each other on the price, quality, and availability of high-quality health care services, and increasing the likelihood of harmful coordination.

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