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Imposed restrictions placed on Geisinger, Shamokin merger

Published July 29. 2011 05:02PM

Pennsylvania Attorney General Linda Kelly on Wednesday announced that her office has imposed restrictions on the proposed merger of Geisinger Medical Center and Shamokin Area Community Hospital over antitrust concerns that the merger may substantially lessen or eliminate competition in the region, especially for Medicare Advantage Plans.

Kelly said that Medicare Advantage Plans provide a health plan to seniors typically with richer benefits and lower co-pays than traditional Medicare. Geisinger offers a Medicare Advantage Plan in competition with several other plans in Northumberland County. In recent years, Geisinger has limited its participation in Medicare Advantage Plans it does not own.

Kelly said that the office's Antitrust Section filed a final order that seeks to preserve health-care competition in the region while ensuring good faith negotiations with health plans and maintaining high quality and affordable health services to the community.

Geisinger Medical Center and Shamokin Area Community Hospital are the two largest providers of inpatient acute-care hospital services in Northumberland County and combined they would control 60 percent of the hospital market in the region.

Kelly said the review of the merger revealed that a merger between the two hospitals would substantially lessen competition for the provision of the primary and secondary inpatient acute-care hospital services sold to Medicare Advantage Plans, as well as primary and specialty physician services in Northumberland County.

As part of the final order, Geisinger Medical Center will extend Shamokin Area Community Hospital's Medicare Advantage Plan Contracts with health plans for three years from the date of closing.

Kelly said that Geisinger Medical Center will extend privileges to independent physicians in Northumberland County with privileges at Shamokin. Geisinger generally does not allow independent physicians to have privileges at its facilities.

The Commonwealth's case was handled by Chief Deputy Attorney General James Donahue III and Deputy Attorneys General Tracy W. Wertz and Jennifer A. Thomson of the Attorney General's Antitrust Section.

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