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40058 Federal Register / Vol. 70, No.

132 / Tuesday, July 12, 2005 / Notices

and Monika Gerdes, all of Germany the Department of Justice, Antitrust B. Overview of the West Virginia Health
(collectively, ‘‘Gerdes’’). Division, 125 Seventh Street, NW., Care Authority, Its Cost Based Rate
On May 16, 2005, Stant filed a motion Room 200, Washington, DC 20530, Review System and the Certificate of
to terminate the investigation based on (telephone (202) 514–2481), and at the Need Program
withdrawal of its complaint. Gerdes Office of the Clerk of the United States By way of background, the Health
opposed Stant’s motion for termination District Court for the Southern District Care Cost Review Authority (hereinafter
and further requested that, pursuant to of West Virginia, 601 Federal Street, ‘‘HCCRA’’) was created by the
rule 210.25(a)(2), the ALJ sua sponte Room 2303, Bluefield, West Virginia Legislature in 1983, as an autonomous
impose sanctions on Stant for abuse of 24701. Copies of any of these materials agency within state government, W.Va.
Commission process. The Commission’s may be obtained upon request and Code § 16–29B–5. The Authority, then
Investigative Attorney (‘‘IA’’), however, payment of a copying fee. known as HCCRA, is charged with the
supported Stant’s motion to terminate. responsibility for collecting information
The ALJ granted Stant’s motion to J. Robert Kramer II,
on health care costs, developing a
terminate the investigation based on Director of Operations, Antitrust Division.
system of cost control, and ensuring
withdrawal of the complaint on June 10, United States District Court, for the accessibility to appropriate acute care
2005, but declined to impose sanctions Southern District of West Virginia, Bluefield beds. W.Va. Code § 16–29B–1, et seq.
on Stant (ID, Order No. 10). Gerdes filed Division. This same legislation expanded the
a Petition for Review of the ID on June United States of America, Plaintiff, HCCRA’s responsibilities to include the
17, 2005. Stant filed a response to Bluefield Regional Medical Center, Inc., and administration of two previously
Gerdes’s petition on June 24, 2005, and Princeton Community Hospital Association, enacted cost containment programs: (1)
the IA filed a response on June 23, 2005. Inc., Defendants. the Certificate of Need (hereinafter
Having considered the ALJ’s rationale Civil Action No. 1.05–0234.
‘‘CON’’) program, which is codified at
and the arguments made by the Parties, W.Va. Code §§ 16–2D–1, et seq.; and (2)
Response to Competitive Impact
the Commission has determined not to the Health Care Financial Disclosure
Statement on Behalf of the West
review the ALJ’s ID granting Act, which is codified at W.Va. Code
Virginia Health Care Authority
Complainant’s motion to terminate the §§ 16–5F–1, et seq. In 1997, the
investigation on the basis of withdrawal The West Virginia Health Care Legislature enacted a statute renaming
of the complaint. Accordingly, the Authority (hereinafter ‘‘Authority’’) files the HCCRA as the West Virginia Health
above-referenced investigation is hereby this response to the Competitive Impact Care Authority. W.Va. Code § 16–29B–2.
terminated. Statement published on April 7, 2005. The Authority’s purpose is ‘‘to protect
The authority for the Commission’s The purpose of this response is to set the health and well-being of the citizens
determination is contained in section forth the Authority’s analysis of the of this state by guarding against
337 of the Tariff Act of 1930, as state action doctrine and to clarify the unreasonable loss of economic resources
amended (19 U.S.C. 1337), and in statutory powers conferred upon the as well as to ensure the continuation of
sections 210.42 to 210.46 of the Authority by the West Virginia appropriate access to cost-effective
Commission’s Rules of Practice and Legislature. quality health care services.’’ W.Va.
Procedure (19 CFR 210.42–210.46). Code § 16–29B–1. This statute created a
Issued: July 7, 2005.
I. Statement of Facts three member Board vested with the
By order of the Commission. A. History of Bluefield Regional Medical power to ‘‘approve or disapprove
Marilyn R. Abbott, Center and Princeton Community hospital rates * * *.’’ W.Va. Code
Secretary to the Commission. Hospital §§ 16–29B–5 & 19.
[FR Doc. 05–13611 Filed 7–11–05; 8:45 am]
The Authority establishes hospital
Bluefield Regional Medical Center rates for a group of payors termed
(hereinafter ‘‘BRMC’’) owns and ‘‘nongovernmental payors’’ or ‘‘other
operates a 265 bed acute care not-for- payors.’’ This group includes public and
profit hospital in Bluefield, West private insurers, persons who pay for
DEPARTMENT OF JUSTICE Virginia. Princeton Community Hospital their own hospital services and all other
(hereinafter ‘‘PCH’’) owns and operates third party payors who are not
Antitrust Division
a 211 bed acute care not-for-profit government-related. W.Va. Code §§ 16–
Public Comment and Response on hospital in Princeton, West Virginia. In 29B–1, et seq.; Hospital Cost Based Rate
Proposed Final Judgment addition to the Princeton facility, PCH Review System, 65 C.S.R. §§ 5–1, et seq.
also owns and operates St. Luke’s The Authority is also statutorily
Pursuant to the Antitrust Procedures Hospital, LLC, a 79 bed acute care responsible for establishing the
and Penalties Act, 15 U.S.C. 16(b)–(h), hospital in Bluefield, West Virginia. nongovernmental average charge per
the United States hereby publishes BRMC and PCH are located in close discharge for inpatient and outpatient
below the comment received on the proximity to one another in Mercer services for acute care hospitals in the
proposed Final Judgment in United state. Accordingly, once a year,
County, Southern West Virginia. Mercer
States v. Bluefield Regional Medical hospitals may file a rate application
County ranks 15 out of 55 counties for
Center, Inc. and Princeton Community with the Authority seeking a rate
the percentage of non-elderly adults
Hospital Association, Inc., Civil Case increase pursuant to W.Va. Code § 16–
without health insurance in the State of
No. 1:05–0234 (DAF), which was filed 29B–21. Ultimately, the Authority has
West Virginia.1 Thus, a significant
in the United States District Court for the right to: (1) Approve a rate request,
portion of the population of this county
the Southern District of West Virginia, (2) modify a rate request, or (3) deny a
is rural and uninsured.
together with the United State’s rate request. W.Va. Code § 16–29B–19.
response to the comment, on June 30, 1 Health Insurance in West Virginia: The Non-
In evaluating rate applications, the
2005. elderly Adult Report, July 2002 and reprinted May
Authority utilizes a hospital’s rate
Copies of the comment and the 2003 available at application as the primary source of
response are available for inspection at reports_2002.htm. information in setting its rates. The

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Federal Register / Vol. 70, No. 132 / Tuesday, July 12, 2005 / Notices 40059

Authority also utilizes other documents C. CON Applications Filed by BRMC for West Virginia counties: McDowell,
on file with the Authority as additional the Development of Cardiac Surgery Mercer, Monroe, Raleigh, Summers and
sources of data, such as audited Services and PCH for the Development Wyoming; and the following Virginia
financial statements, Uniform Reporting of a Comprehensive Cancer Center counties: Bland, Giles, and Tazwell.
System Financial Reports, Medicare In 1999, BRMC submitted an The DOJ contends that the cardiac
Cost Reports, the hospital’s trial balance application to offer cardiac surgery surgery and cancer center agreements
and the Uniform Billing (hereinafter services. While a need appeared to exist violate Section 1 of the Sherman Act, 15
‘‘UB’’) UB–92 discharge bills. The in the area, the Authority denied this U.S.C. 1 and ‘‘have the effect of
Authority then compares the rate request because BRMC was not able to unreasonably restraining competition
application to the audited financial show that it would be able to attract a and allocating markets for cancer and
statements, the Uniform Financial sufficient number of patients without cardiac surgery services to the detriment
Report and the Medicare Cost Report in working with other area hospitals, of consumers.’’ (Complaint filed by DOJ
order to determine whether the namely PCH. On January 23, 2003, on March 21, 2005 at ¶ 1.) The DOJ
information in the rate application is BRMC, Charleston Area Medical Center, requested the following relief in its
consistent, in all material aspects, with and PCH submitted a joint application
complaint: that the Court declare the
the other filings. The UB–92 for a CON to establish cardiac surgery
cardiac surgery and cancer center
information is used to compare services to be located at BRMC. This
application was initially contested by agreements violate Section 1 of the
discharges and case mix indices. The Sherman Act, 15 U.S.C. 1 and that the
case mix for each hospital is determined Richard Lindsay, M.D., the West
Virginia Consumer Advocate Court enjoin the defendants from
from diagnostic related groups enforcing the agreements and to further
(hereinafter ‘‘DRG’’) weights in effect (hereinafter ‘‘WVCA’’), and the West
Virginia Public Employees Insurance prohibit the parties from entering into
during the hospital’s fiscal year. additional agreements to allocate cancer
Agency (hereinafter ‘‘WVPEIA’’). WVCA
The Authority establishes several and WVPEIA subsequently withdrew or cardiac surgery services. (Complaint
limits during the rate setting process their requests for hearing and the at ¶ 30.)
and a hospital is expected to monitor Authority found that Richard D. Lindsay II. ANALYSIS OF LAW
each of these limits to ensure that it is did not qualify as an affected party. On
in compliance with the Authority’s August 1, 2003, the applicants were A. Applicable Law
established rates. W.Va. C.S.R. § 65–5– granted a CON.
10.2. If a hospital exceeds its approved On July 15, 2003, PCH and BRMC The United States Supreme Court case
rates, then it has an overage. This filed a letter of intent to develop a Parker v. Brown, 317 U.S. 341 (1943),
overage may be justified through case freestanding Community Hospital serves as the legal foundation of the
mix, outliers, new service or other Comprehensive Cancer Center facility to state action antitrust defense. This
events which could not have reasonably be located at PCH. PCH proposed ‘‘state action doctrine’’ immunizes
been foreseen. W.Va. C.S.R, §§ 65–5– acquiring existing radiation therapy anticompetitve acts if taken pursuant to
10.3–10.3.4. If any portion of the equipment from BRMC and submitted a state policy. The Court later refined this
overage is not justified, then the CON application on July 30, 2003. doctrine in a series of cases.
hospital has an unjustified overage and Several parties requested affected party For example, in California Retail
is subject to penalties in subsequent status and requested that a hearing be Liquor Dealers Ass’n v. Midcal
conducted with respect to this Aluminum Inc., 445 U.S. 97 (1980) the
application. This matter was scheduled
With respect to the CON program, the United States Supreme Court articulated
for hearing and ultimately cancelled. To
Authority’s Board has been empowered two criteria to be established before a
date, the matter has never been heard
by the Legislature to enact legislative and is still on hold. party may qualify for immunity under
rules, to develop the State Health Plan the state action doctrine. First, there
D. BRMC and PCH Entered Into must be a clear articulation of the state
and to consider CON applications.
Agreements Regarding Their CON policy in question. Second, the Court
W.Va. Code §§ 16–2D–3(b)(5); 16–2D–5.
Applications Which Were Subsequently determined that the action in question
The law requires that a hospital obtain
Investigated by the Department of must be actively supervised by the state.
a CON prior to developing cardiac
surgery or radiation therapy services. With respect to the clear articulation
The Department of Justice (hereinafter prong, the Court held that a private
With respect to the State Health Plan
‘‘DOJ’’) sent letters to BRMC and PCH party seeking Sherman Act immunity
Cardiac Surgery Standards, the inquiring about agreements the
Authority has exhibited a preference for under the state action doctrine need not
hospitals entered into on January 30, point to a specific detailed legislative
joint applicants seeking to provide 2003 (hereinafter called ‘‘cardiac
cardiac surgery services. The Authority authorization for its challenged conduct
surgery and cancer center agreements’’). as long as the state clearly intends to
encouraged parties to work together to The agreements applied to PCH’s
ensure that services were not duplicated displace competition in a particular
provision of certain cancer center
in the various geographic areas in order field. Southern Motor Carriers Rate
services and the cardiac surgery
to ensure the development of a quality agreement concerned BRMC’s plan to Conference, Inc. v. United States, 471
open heart program. Several studies establish and offer cardiac surgery U.S. 48, 64 (1985). With respect to the
have shown a direct correlation between services. The term of the agreements active supervision prong, the Court has
high volume programs and success was for five years after the first cardiac indicated that the state’s supervision
rates. Therefore, the Authority surgery is performed at BRMC or the cannot be minimal. Patrick v. Burget
determined that joint applications first cancer patient is treated at PCH, 486 U.S. 94 (1988). Rather, the state
would produce greater volumes and whichever is later. By their terms, the officials must exercise ultimate control
therefore provide greater quality of cardiac surgery and cancer center over the challenged anticompetitive
service. agreements applied to the following conduct. Id at 101.

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40060 Federal Register / Vol. 70, No. 132 / Tuesday, July 12, 2005 / Notices

B. Application of Existing Law to BRMC order to demonstrate the need for a process as well as oversee the hospital’s
and PCH service, a party often must conduct an rates.
Courts have liberally applied the state analysis of the level of services being
III. Conclusion
action doctrine over the years.2 This has offered by existing providers and project
the amount of services that will be The Authority realizes that both PCH
caused both the FTC and DOJ to
needed in the future. If existing and BRMC have decided to enter into a
challenge the applicability of the state
providers are not serving the consent decree to resolve the DOJ’s
action doctrine. For example, in
population, then an unmet need exists. investigation. The Authority’s purpose
September 2003, the FTC issued a report
At a fundamental level this controls the in filing these comments is not to
analyzing the applicability of the state
market and allows only those providers prevent this judgment from being
action doctrine.3 This report concluded
that can establish need to enter the entered, but rather is to clarify its
that ‘‘overly broad interpretations of the
market. Thus, the West Virginia health statutory powers and set forth its
state action doctrine could potentially
care market is regulated and growth is opinion regarding the state action
impede national competition policy
controlled. doctrine.
goals.’’ Id at p. 2. Recently, the DOJ and
FTC issued a report which criticized In addition, the Authority has United States of America, Plaintiff, v.
state CON programs as promoting determined that in order to have a high Bluefield Regional Medical Center, Inc., and
anticompetitive markets.4 volume, quality cardiac surgery project Princeton Community Hospital Association,
in Southern West Virginia, hospitals Inc., Defendants.
Based upon comments contained in Civil Action No. 1:05–CV–00234.
the Competitive Impact Statement, it must coordinate their efforts. In the
appears that the DOJ has attempted to newly revised State Health Plan cardiac Plaintiff United States Response to
re-define the criteria for determining Surgery Standards, the Authority gave Public Comment
when the state action doctrine applies. preference to joint applicants in this
geographic area. BRMC and PCH filed a Pursuant to the requirements of the
However, this Competitive Impact Antitrust Procedures and Penalties Act,
Statement does not negate joint application for the development of
cardiac surgery services which was 15 U.S.C. 16(b)–(h) (‘‘APPA’’ or
approximately fifty years of United ‘‘Tunney Act’’), the United States
States Supreme Court precedent. ultimately approved. Previously, an
individual application filed by BRMC hereby responds to the one public
Existing law clearly provides that the comment received regarding the
was denied. The recently newly
actions of BRMC and PCH should proposed Final Judgment in this case.
approved joint application will allow
qualify for immunity under the state After careful consideration of the
residents in Southern West Virginia to
action doctrine. comment, the United States continues to
With respect to the clear articulation benefit from a quality program in close
proximity to their homes. believe that the proposed Final
prong of the two part test, the Authority Judgment will provide an effective and
With respect to the active supervision
was clearly created to control health appropriate remedy for the antitrust
prong, the Authority clearly has on-
care costs and to prevent the violation alleged in the Complaint. The
going supervision of West Virginia acute
unnecessary duplication of services. United States will move the Court for
care hospitals. For example, the
W.Va Code § 16–29B–1. At their core, entry of the proposed Final Judgment
Authority establishes, on a yearly basis,
all CON programs control the after the public comment and this
the average charge per nongovernmental
development of services, or the health Response have been published in the
discharge that all acute care hospitals in
care market, in order to keep costs the state may charge. The Authority has Federal Register, pursuant to 15 U.S.C.
down.5 This is especially important in the power to impose significant 16(d).
West Virginia, which has a high rate of penalties on those hospitals that do not On March 21, 2005, the United States
uninsured individuals who already face comply with the Authority’s established filed a Complaint alleging that Bluefield
difficulties in accessing health care. rates. The Authority has the power to Regional Medical Center, Inc., (BRMC)
Therefore, the Authority controls the and Princeton Community Hospital
collect financial disclosure from all
health care market by regulating entry Association, Inc., (PCH) violated section
covered entities, which includes acute
into the market through its laws and care hospitals, in West Virginia on a 1 of the Sherman Act (15 U.S.C. 1) by
regulations. W.Va. 16–2D–1, et seq.; 65 yearly basis. In addition, the Authority entering into two agreements on January
C.S.R. 7. For example, in order to be has the right to approve or deny a CON 30, 2003, in which BRMC agreed not to
approved for a CON, the service must be for new institutional health services. offer many cancer services and PCH
needed and consistent with the State The Authority’s CON powers are very agreed not to offer cardiac-surgery
Health Plan. W.Va. Code § 16–2D–9(b); broad. Even after the CON is issued, services. At the same time the
Princeton Community Hospital v. State parties must submit progress reports Complaint was filed, the United States
Health Planning and Development and request substantial compliance also filed a proposed Final Judgment
Agency, 328 S.E.2d 164 (W.Va. 1985). In before a file may be closed. Further, the and a Stipulation signed by the United
Authority retains oversight of a CON for States and defendants consenting to the
2 See e.g., Askew v. DCH Regional Healthcare
at least three years after it is issued. In entry of the proposed Final Judgment
Authority, 995 F.2d 1033 (11th Cir. 1994) and FTC
v. Hospital Board of Directors of Lee County, 38 this regulatory environment, oversight after compliance with the requirements
F.3d 1184 (11th Cir. 1994). clearly does exist. of the Tunney Act. Pursuant to those
3 Report of the State Action Task Force (Sept. Rather than contend with the total requirements, the United States filed a
2003) available at picture, the DOJ narrowed its focus to Competitive Impact Statement (‘‘CIS’’)
4 Improving Health Care: A Dose of Competition,
only the written cardiac surgery and with this Court on March 21, 2005;
(July, 2004) available at cancer center agreements. Although the published the proposed Final Judgment,
healthcare/040723healthcarept.pdf. Authority does not have standing to Stipulation, and CIS in the Federal
5 W.Va. Code § 16–29B–26 provides state antitrust enforce the actual agreements, these Register on April 4, 2005, see 70 FR
immunity for the actions of health care providers agreements served as the basis for the 17117 (2005); and published a summary
under the Authority’s jurisdiction, when such
actions are made in compliance with orders,
CON applications submitted and filed of the terms of the proposed Final
directives, rules or regulations issued or by both parties. The Authority certainly Judgments and CIS, together with
promulgated by the Authority’s Board. has the power to regulate the CON directions for the submission of written

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Federal Register / Vol. 70, No. 132 / Tuesday, July 12, 2005 / Notices 40061

comments relating to the proposed Final if any, to be derived from a determination of explanations are reasonable under the
Judgment, in the Washington Post for the issues at trial.2 circumstances.6
seven days beginning on April 1, 2005
As the U.S. Court of Appeals for the III. Summary of Public Comments and
and continuing on consecutive days
District of Columbia Circuit has held, the United States’ Response
through April 7, 2005, and the
the Tunney Act permits a court to
Charleston Gazette, a newspaper of During the 60-day public comment
consider, among other things, the
general circulation in the Southern period, the United States received one
relationship between the remedy
District of West Virginia, beginning on comment, from the West Virginia Health
secured and the specific allegations set
April 4, 2005 and continuing on Care Authority (WVHCA), which is
forth in the government’s complaint,
consecutive days through April 9, 2005, attached hereto. The WVHCA, among
whether the proposed Final Judgment is
and on April 11, 2005. The 60-day other duties, is responsible for
sufficiently clear, whether enforcement
period for public comments ended on administering West Virginia’s certificate
mechanisms are sufficient, and whether
June 5, 2005, and the United States of need (‘‘CON’’) program and
the proposed Final Judgment may
received one comment as described establishing hospital rates for non-
positively harm third parties.3
below and attached hereto. governmental payors, such as private
With respect to the adequacy of the
I. Background insurers, in West Virginia.
relief secured by the proposed Final
Judgment, courts have held that: The WVHCA does not seek to prevent
As explained more fully in the
entry of the proposed Final Judgment.
Complaint and CIS, the defendants’ [t]he balancing of competing social and
political interests affected by a proposed Rather, the WVHCA states that its
cancer and open-heart agreements
antitrust consent decree must be left, in the purpose is to ‘‘set forth the Authority’s
effectively allocated markets for cancer
and cardiac-surgery services and first instance, to the discretion of the analysis of the state action doctrine and
restrained competition to the detriment Attorney General. The court’s role in to clarify the statutory powers conferred
protecting the public interest is one of upon the Authroity by the West Virginia
of consumers in violation of section 1 of insuring that the government has not
the Sherman Act. The proposed Final Legislature.’’ (WVHCA Comment, p. 1).
breached its duty to the public in consenting The state-action doctrine provides
Judgment will restore competition by to the decree. The court is required to
annulling the BRMC–PCH agreements immunity from federal antitrust library
determine not whether a particular decree is
and prohibiting BRMC and PCH from the one that will best serve society, but when a defendant has satisfied a two-
taking actions that would reduce whether the settlement is ‘‘within the reaches part test by first showing that the
competition between the two hospitals of the public interest.’’ More elaborate challenged restraint is one clearly
for patients needing cancer and cardiac- requirements might undermine the articulated and affirmatively expressed
surgery services. Entry of the proposed effectiveness of antitrust enforcement by as state policy and then showing that
consent decree.4 the restraint is actively supervised by
Final Judgment would terminate this
action, except that the Court would ‘‘[A] decree must be approved even if the state.7 The WVHCA believes that the
retain jurisdiction to construe, modify, it falls short of the remedy the court defendants’ actions qualify for
or enforce the provisions of the would impose onits own, as long as it immunity under the state-action
proposed Final Judgment and to punish falls within the range of acceptability or doctrine. (WVHCA Comment, p. 8).
violations thereof. is ‘witnin the reaches of public As an initial matter, the Court need
interest.’ ’’ 5 Furthermore, not rule on whether the state-action
II. Legal Standard Governing the
Court’s Public Interest Determination [a]bsent a showing of corrupt failure of the doctrine provides federal antitrust
government to discharge its duty, the Court, immunity to the challenged agreements.
Upon the publication of the public in making its public interest funding, should The Court’s role under the Tunney Act
comment and this Response, the United * * * carefully consider the explanations of
is limited to reviewing the remedy in
the government in the competitive impact
States will have fully complied with the statement and its responses to comments in relationship to the violations that the
Tunney Act and will move the Court for order to determine whether those United States has alleged in its
entry of the proposed Final Judgment as Complaint. The Tunney Act does not
being ‘‘in the public interest.’’ 1 The 2 15U.S.C. 16(e)(1). authorize the Court to construct a
Court, in making its public interest 3 SeeUnited States v. Microsoft Corp., 56 F.3d ‘‘hypothetical case adn then evaluate
determination, shall consider: 1448, 1458–62 (D.C. Cir. 1995). the decree against that case.’’ Microsoft,
4 Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)
(A) the competitive impact of such 56 F.3d at 1459. Indeed, the WVHCA
(emphasis added) (citations omitted). Cf. United
judgment, including termination of alleged
States v. BNS Inc., 858 F.2d 456, 464 (9th Cir. 1988)
does not argue that the proposed Final
violations, provisions for enforcement and (holding that the court’s ‘‘ultimate authority under Judgment is not ‘‘within the reaches of
modification, duration or relief sought, the [Tunney Act] is limited to approving or public interest’’ or that the remedy
anticipated effects of alternative remedies disapproving the consent decree’’); United States v. secured does not fit the violations
actually considered, whether its terms are Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)
(noting that, in this way, the court is constrained
alleged. Nor does the WVHCA assert
ambiguous, and any other competitive
considerations bearing upon the adequacy of to ‘‘look at the overall picture not hypercritically, that any public or private interest would
such judgment that the court deems nor with a microscope, but with an artist’s reducing be harmed by the entry of the judgment,
glass’’); see generally Microsoft, 56 F.3d at 1461 or that the judgment inadequately or
necessary to a determination of whether the (discussing whether ‘‘the remedies [obtained in the
consent judgment is in the public interest; decree are] so inconsonant with the allegations improperly preserves the role of
and charged as to fall outside of the ‘reaches of the competition in the relevant markets
(B) the impact of entry of such judgment public interest’ ’’). within the regulatory framework
upon competition in the relevant market or 5 United States v. AT&T Corp., 552 F. Supp. 131,
established by the Commonwealth of
markets, upon the public generally and 151 (D.D.C. 1982) (citations omitted)(quoting
individuals alleging specific injury from the Gillette, 406 F. Supp. at 716), aff’d sub nom.
6 United States v. Mid-America Dairymen, Inc.,
violations set forth in the complaint Maryland v. United States, 460 U.S. 1001 (1983);
see also United States v. Alcan Aluminum Ltd., 605 1977–1 Trade Cas. (CCH) ¶ 61,508, at ¶ 71,980
including consideration of the public benefit, (W.D. Mo. 1977).
F. Supp. 619, 622 (W.D. Ky. 1985) (approving the
consent judgment even though the court would 7 California Retail Liquor Dealers Ass’n v. Midcal
1 15 U.S.C. 16(e). have imposed a greater remedy). Aluminum, 445 U.S. 97, 105 (1980).

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40062 Federal Register / Vol. 70, No. 132 / Tuesday, July 12, 2005 / Notices

West Virginia.8 In short, the WVHCA whether state-action immunity exists is the antitrust violation alleged in the
has provided no argument against entry not whether the WVHCA actively Complaint and is, therefore, in the
of the proposed Final Judgment and supervises some aspects of hospital public interest. Pursuant to Section
does not object to its entry. regulation in West Virginia, but whether 16(d) of the Tunney Act, the United
Consequently, the WVHCA’s comment the WVHCA is empowered to supervise States is submitting the public
does not support disapproving the and has actively supervised the comments and its Response to the
proposed Final Judgment. defendants’ agreements. Federal Register for publication. After
Even if the Court were to consider the The WVHCA does not have such the comments and its Response are
applicability of the state action doctrine, powers and has not actively supervised published in the Federal Register, the
the WVHCA’s comment does not the defendants’ agreements. The West United States will move this court to
demonstrate that the doctrine should Virginia legislature has not empowered enter the proposed Final Judgment.
apply in this case. With regard to the the WVHCA to require parties to private
Dated: June ll, 2005
first part of the state-action test, the agreements to maintain, alter, or
Respectfully submitted,
comment discusses the WVHCA’s abandon their agreements. Thus, the
powers over West Virginia’s CON WVHCA has no power to exercise active For Plaintiff United States:
Kasey Warner,
program. (WVHCA Comment, pp. 8–10). supervision or control over private
But the comment does not discuss agreements such as the cancer and United States Attorney.
By: Fred B. Westfall,
whether those powers allow the open-heart agreements. Moreover, the
WVHCA to authorize market-allocation Assistant United States Attorney.
WVHCA has not purported to actively
agreements between private parties such supervise the cancer and open-heart Peter J. Mucchetti,
as the ones challenged in the Complaint. Joan S. Huggler,
agreements, as it did not (1) develop a
Mitchell H. Glende,
In fact, the WVHCA’s CON powers do factual record concerning the initial or
not allow it to authorize such Attorneys for the United States, Antitrust
ongoing nature and effect of the Division.
agreements.9 Rather the West Virginia agreements, (2) issue a written decision
legislature empowered the WVHCA to United States Department of Justice, 1401 H
approving the agreements, or (3) assess Street, NW., Suite 4000, Washington, DC
administer West Virginia’s CON whether the agreements further criteria 20530.
program only according to legislatively established by the West Virginia
established procedures, consisting legislatures.12 [FR Doc. 05–13533 Filed 7–11–05; 8:45 am]
principally of granting or denying CONs The WVHCA’s rate-regulation BILLING CODE 4410–11–M
to firms wishing to compete.10 Because responsibilities do not satisfy the active-
the West Virginia legislature did not supervision requirement because the
empower the WVHCA to authorize challenged anticompetitive conduct in NATIONAL SCIENCE FOUNDATION
private market-allocation agreements, this matter is not the prices charged by
the defendants’ cancer and open-heart the hospitals to non-governmental Agency Information Collection
agreements do not qualify for state- payors, but rather the terms of the Activities: Comment Request
action immunity. cancer and open-heart agreements. the AGENCY:National Science Foundation.
With regard to the second part of the WVHCA’s rice regulation activities do
state-action test, the comment states that Submission for OMB review;
not directly address market-allocation comment request.
the WVHCA ‘‘clearly has on-going issues or the potential anticompetitive
supervision of West Virginia acute care effects of such allocations as rate SUMMARY: Under the Paperwork
hospitals’’ through West Virginia’s CON regulation may fail to ensure that the Reduction Act of 1995, Pub. L. 104–13
program and regulation of hospital rates hospitals charge rates equal to those (44 U.S.C. 3501 et seq.), and as part of
for non-governmental payors. (WVHCA rates that would have prevailed in a its continuing effort to reduce
Comment, p. 10). However, the active- competitive market and fails to address paperwork and respondent burden, the
supervision requirement of the state- decreases in quality of service, National Science Foundation (NSF) is
action doctrine requires that the State innovation, and consumer choice that inviting the general public and other
actively supervise and exercise ultimate result from an agreement not to Federal agencies to comment on this
control over the challenged compete. proposed continuing information
anticompetitive conduct.11 So the The WVHCA comment also does not collection. This is the second notice for
relevant question for determining address the fact that the defendants’ public comment; the first was published
agreements allocated markets for cancer in the Federal Register at 70 FR 19508
8 The question of state-action immunity may not

properly be before the Court. State-action immunity

and cardiac surgery in the three Virginia and one comment was received. NSF is
is essentially an affirmative defense with the party counties. As the WVHCA is not vested forwarding the proposed submission to
claiming state-action immunity bearing the burden with any power concerning matters in the Office of Management and Budget
of proof in establishing the defense. Ticor Title, 504 the Commonwealth of Virginia, the (OMB) for clearance simultaneously
U.S. at 625; town of Hallie v. City of Eau Claire, 471
U.S. 34, 37–39 (1985); Yeager’s Fuel v.
powers and actions of the WVHCA with the publication of this second
Pennsylvania Power & Light, 22 F.3d 1260, 1267 (3d cannot create state-action immunity for notice.
Cir. 1994); Nugget Hydroelectric, L.P. v. Pacific Gas an agreement not to complete in DATES: Comments regarding these
& Elec. Co., 981 F.2d 429, 434 (9th Cir. 1992). In Virginia.
the present matter, the defendants have chosen not information collections are best assured
to assert a state-action defense but instead to IV. Conclusion of having their full effect if received by
stipulate that the Court may enter the proposed OMB within 30 days of publication in
Final Judgement. After careful consideration of the
9 See W. Va. Code § 16–2D–1 et seq., W. Va. Code WVHCA comment, the United States the Federal Register.
St. R. § 65–7–1 et seq., W. Va. Code § 16–29b–1 et still concludes that entry of the ADDRESSES: Written comments
seq. regarding (a) whether the collection of
10 W. Va. Code § 16–2D–1 et seq., W. Va. Code St.
proposed Final Judgment will provide
an effective and appropriate remedy for information is necessary for the proper
R. § 65–7–1 et seq., W. Va. Code § 16–29B–1 et seq.
See also CIS, pp. 8–10. performance of the functions of NSF,
11 Midcal, 445 U.S. at 105, Patrick v. Burget, 486 12 See FTC v. Ticor Title Ins. Co., 504 U.S. 621, including whether the information will
U.S. 94, 100–101 (1988). 637–639 (1992). have practical utility; (b) the accuracy of

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