Industry
FTC Tightens Failing Firm Defense Standards for Hospital Acquisitions
The Federal Trade Commission is applying stricter standards to the failing firm defense in hospital merger reviews, even as rural and critical access hospitals face documented financial pressures from low reimbursements, high Medicaid and Medicare volumes, uninsured patient populations, and expired pandemic relief funding. Hospitals seeking acquisition approval must now meet heightened thresholds to demonstrate they cannot remain independent or find alternative purchasers. The guidance affects health systems pursuing distressed hospital acquisitions, including those serving significant Medicaid populations.
Why it mattersHospitals with high Medicaid volumes face additional challenges securing FTC approval for financially-motivated acquisitions, potentially limiting exit options for facilities serving Medicaid-heavy markets.