Jefferson Health announced its proposed acquisition of Albert Einstein Healthcare Network for $599 million in 2018. The deal would bring Einstein’s three acute care hospitals and one inpatient rehabilitation facility into the Jefferson portfolio. 

Counsel for both parties engaged NERA to evaluate the potential competitive effects of the transaction for both inpatient rehabilitation and general acute services during the FTC’s and Pennsylvania Attorney General’s review of the transaction. NERA’s team, led by Dr. Subbu Ramanarayanan and Dr. Emily Walden, worked with Counsel to make multiple presentations and submissions to the agencies regarding the competitive impact of the merger and coordinated efforts to comply with the FTC’s second request.

After the merger was challenged by the FTC and the Pennsylvania AG’s Office, Dr. Ramanarayanan was retained by the parties to provide expert testimony at the preliminary injunction hearings pertaining to the impact of the transaction on inpatient rehabilitation services. Dr. Ramanarayanan’s testimony covered issues related to relevant product and geographic market definition as well as competitive effects. This is the first time that an FTC challenge to a hospital merger included inpatient rehabilitation services as one of the relevant markets being challenged.

A district court rejected the FTC's request for a preliminary injunction, and the Third Circuit subsequently declined to issue an emergency stay while the FTC appealed. Subsequently, the Pennsylvania AG dropped its part in the challenge, and the Federal Trade Commission voted 4–0 to drop its appeal, allowing the merger to close. This is the first hospital merger challenge the FTC has lost in over two decades.