Hospitals have more questions than answers about non-competition amid FTC proposal

The Federal Trade Commission on Jan. 5 released a proposed rule banning non-compete agreements, but it’s unclear if the rule would apply to non-profit hospitals.

This was announced by the representative of the American Hospital Association. Becker According to the organization, “nonprofit hospitals are exempt from the tax because the FTC has no power over nonprofits.” This was announced by the representative of the American Medical Association. Becker unclear, “considering less specific wording in the proposed rule”.

This was stated by Roger Strode, a public health attorney and partner at the law firm Foley & Lardner. Becker application of the proposal in hospitals is a question that many people are trying to solve.

“It’s interesting because the FTC Act itself is some vague language that it applies to corporations, and they talk about corporations as corporations that essentially make a profit for the company or its members,” said Mr. n Strode. “So for a long time people looked at it and said, ‘That must mean that [for] this does not apply to non-profit organizations,” or, to take it to the extreme, this does not apply to hospitals. Nothing has ever been disputed about this, and there are scant – if any – indications as to whether this would apply to hospitals.”

Mr. Strode said he believes the wording of the rule will be “significantly cleared up” because the FTC will receive thousands of comments on the proposal.

“This would be a game changer for the healthcare industry, be it hospitals, be it groups of doctors, be it private equity buying practices,” he said. “There is tremendous value in non-competition, which in many cases is paid for.”

Michael Kass, partner at Armstrong Teasdale Law Firm, announced this. Becker“If the health care provider is indeed a non-profit organization, it appears to be exempt from the FTC Act and not subject to the proposed non-compete rule.”

However, he added that “until the government clearly states its position on this issue, we simply do not know for sure how this issue will be resolved.”

Mr Kass also said he expects more clarity from the FTC in the coming months.

Legal problems with the rule are also likely, Mr Strode said.

“The FTC will challenge … in court all of this and its breadth and also, frankly, their jurisdiction to make this rule,” he said.