Business

Judge to St. Luke’s and Saltzer: Hand over your plan

A federal judge is ordering Boise-based St. Luke’s Health System and Nampa-based Saltzer Medical Group to file details about their plan to split up.

U.S. District Judge B. Lynn Winmill’s order comes a year and a half after he ordered St. Luke’s to fully unwind its buyout of Saltzer because of antitrust violations.

The Federal Trade Commission and Idaho Attorney General’s Office had asked Winmill to order the health-care organizations to turn over their plans for divestiture, along with a slew of data and other records.

The two agencies argued that St. Luke’s wants to retain some of Saltzer’s service lines, and that Saltzer is being released as a smaller and less-comprehensive version of the practice it was before. They said St. Luke’s should prove it has rigorously tried to find a buyer for Saltzer.

Saint Alphonsus Health System and Treasure Valley Hospital sued in 2012, saying the Saltzer purchase would give St. Luke’s too much control over the Nampa area’s primary-care market.

But the defendants, St. Luke’s and Saltzer,told the judge that unwinding the deal more than two years after it closed wasmore complicated than expected. They asked Winmill to appoint a “master” to oversee the divestiture and answer questions, such as whether St. Luke’s could continue to operate some of Saltzer’s former services.

“Obviously, defendants are contemplating something other than a full divestiture, and plaintiffs object,” Winmill wrote in his order this week.

Winmill disagreed with the reasons St. Luke’s and Saltzer gave for not wanting to hand over information about their divestiture activities. For example, he said the information would be kept secret if needed.

He also rejected St. Luke’s and Saltzer’s request for a master to oversee the process. His reason for denying that request goes back almost three years, to before the trial.

Winmill decided in 2012 to allow the Saltzer buyout to go forward. He then oversaw the trial in 2013.

“At the very beginning of this litigation, defendants represented to the court that if the merger was allowed to proceed, the court could take ‘some comfort’ in their promise that ‘if the transaction is unlawful, we will not oppose the divestiture’ because ‘[h]ere it would be quite possible to unscramble this egg,’” Winmill wrote. He relied on that promise when he permitted the deal to go through, because he thought “the court will have no difficulty in ordering an immediate and complete divestiture if that is the result compelled at trial.”

“Because that key promise was made to — and relied upon by — this court, the divestiture issues should be resolved by this court,” he said this week. “The motion for a special master will be denied.”

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