FTC warns Tennessee against ending Ballad Health COPA

WASHINGTON, D.C. — The Federal Trade Commission is warning Tennessee legislators that changing state oversight of Ballad Health without health care competition in place could cause higher costs and lower quality of care for patients. In a Wednesday letter that responded to an inquiry from state Rep. David Hawk, R-Greeneville, the federal agency cautioned against legislation that would end the Certificate of Public Advantage (COPA) that governs Ballad without the presence of competing health care systems. The action, it said in a following press release, could have "potential anticompetitive consequences" for patients. "Repealing a COPA law or allowing a specific COPA to expire in the absence of competing healthcare systems enables a monopolist to exercise substantial market power unconstrained by state regulatory oversight or antitrust enforcement against merger-related harms," FTC staff wrote to Hawk. READ- FTC letter to Rep. Hawk.pdf The legislation it referred to, SB2414 and HB2278, would end the Ballad Health COPA on June 30, 2028, and shift antitrust enforcement from the health department to the state attorney general. The COPA, which protects Ballad from antitrust laws, was originally approved by the Tennessee legislature with the idea that health department oversight and regulation would replace market competition. But separate legislation working its way through the statehouse wouldn't allow other inpatient acute care hospitals to easily enter the market until 2030. Groups like the Washington County Republican Party have expressed concern that the two-year gap in dates would leave Ballad to operate with little supervision. The FTC echoes those concerns in its letter. It approves of the planned repeal of Certificate of Need (CON) laws, which require the state to approve certain health care facilities and projects. However, staff are concerned about the state's timing. "The potential opening of a new inpatient acute care hospital would be a positive step toward replacing the hospital competition that was lost in Northeast Tennessee because of the merger that formed Ballad Health," the FTC said in a press release. "Repealing the CON laws as soon as possible—and no later than the expiration of any COPA—would offer the promise of additional competition in Northeast Tennessee." State Sen. Rusty Crowe, R-Johnson City, has previously expressed confidence that the attorney general would be vigorous in supervising the health care system in the meantime, and that he and other state agencies would still be able to hold Ballad accountable if the COPA expires. In statements emailed to Six Rivers Media, Ballad said it is appropriate for the legislature to determine policy going forward, and that it would continue to comply with state and federal antitrust law. The FTC originally opposed Ballad Health's application for state oversight. It argued in 2017 that the benefits of a COPA would not trump the likely harm to health care competition and consumers in the region.