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Geisinger-Lewistown deal approved after antitrust drama

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The Geisinger Health System acquisition of Lewistown Hospital is out of the regulatory queue after a short antitrust drama.

On Friday, Pennsylvania Attorney General Kathleen G. Kane filed a federal antitrust lawsuit against Danville-based nonprofit Geisinger, asking that the proposed Geisinger-Lewistown deal be barred. The lawsuit said the acquisition would give Geisinger almost 70 percent of the primary care physicians in Mifflin and Juniata counties, and about 74 percent of the hospital discharges. The result, it said, would be to suppress or lessen competition substantially for those services.

On Monday, however, Kane announced that her office had reached an eight-year agreement with Geisinger on the following points:

• There will be no arbitrary price increases for hospital and physician services.

Lewistown Hospital will continue to be operated as an acute care hospital for at least eight years.

• Lewistown’s employed primary care physicians can leave Geisinger’s employ up to two years after the merger with no restrictions for continuing to practice in Mifflin and Juniata counties.

• Health plan contracts for Lewistown Hospital and its employed physician group will be maintained for the remainder of their terms. Future contracts will be negotiated in good faith within a range paid to similar hospitals and physicians.

• Geisinger will continue its established practice of not prohibiting health plans from offering health care products, known as “tiered products,” in which health plans offer products to consumers with different tiers of providers based on cost and/or quality. Such tiered products enable consumers to choose their health care services based on the cost and quality of the provider.

Lewistown Hospital subsequently announced that its deal with Geisinger has received final approval from Kane’s office and the Pennsylvania Department of Health, and will become effective on Nov. 1.

“We welcome the Lewistown Hospital team into the Geisinger family, and look forward to building programs, growing services, improving outcomes and demonstrating value to the people of the Juniata Valley,” Geisinger Health System President and CEO Dr. Glenn Steele Jr. said in a news release. He thanked Kane and the Department of Health “for their diligent, constructive, and collaborative review of this transaction.”

“This is tremendous news for Lewistown Hospital, our patients, staff and area residents,” said Lewistown Hospital President and CEO Kay A. Hamilton. “This merger with Geisinger ensures that a strong, nonprofit health care system focused on patients remains in Lewistown. I, too, thank the Attorney General and Department of Health for their review, as well as the community for its support of our hospital.”

Geisinger announced in September that it is pursuing an affiliation with Camp Hill-based Holy Spirit Health System. That area’s health care market is dissimilar from Lewistown’s, and Geisinger stressed that the relationship with Holy Spirit would be quite different from those in its other recent deals.

Heather Stauffer

Heather Stauffer

Heather Stauffer covers Lancaster County, nonprofits, education and health care. Have a tip or question for her? Email her at heathers@cpbj.com. Follow her on Twitter, @StaufferCPBJ.

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