On March 17, 2021, USC Health System (“USCHS”) and Methodist Hospital of Southern California (“Methodist”, now known as “USC Arcadia Hospital”) (collectively, the “parties”) announced their intention to explore an affiliation between the two organizations. Under California law, any transaction involving the sale or transfer of control of a nonprofit hospital must secure the approval of the California Attorney General’s Office (“AGO”). The parties formally submitted notice of their affiliation to the AGO on November 22, 2021.

On June 3, 2022, the AGO conditionally approved the proposed affiliation of USCHS and Methodist pursuant to the “Attorney General’s Conditions to Proposed Change in Control and Governance of Methodist Hospital of Southern California, through an Affiliation Agreement with USC Health System” (the “Conditions”). Among other commitments, the Conditions prohibit anticompetitive practices including “bundling” or “all-or-nothing” contracting, penalizing payors for contracting with individual facilities, and/or interfering with certain payor practices (e.g. benefit designs that reward providers for affordability or quality) for ten (10) years, and sets percentage caps for annual price increases by USC Arcadia Hospital for five (5) years (Condition XVII or “Competitive Impact Conditions”).

As part of the Conditions, William E. Berlin of Hall Render Killian Heath & Lyman (“Hall Render”) was appointed to serve as the Monitor (the “Monitor”) to monitor the parties’ compliance with the Conditions. Mr. Berlin is a shareholder in Hall Render’s Washington, D.C. office, concentrating on federal and state antitrust investigations, as well as litigation, involving health care provider mergers and acquisitions, joint ventures and provider networks, exclusionary conduct, and contracting provisions between hospitals, physicians and health plans. Mr. Berlin has served as an arbitrator and mediator in antitrust disputes and currently monitors several other merger consent decrees on behalf of  the United States Department of Justice Antitrust Division and Federal Trade Commission.

In monitoring compliance with the Conditions, the Monitor has certain enumerated powers to investigate USCHS’s compliance with the Conditions, take complaints from payors, USCHS, or the AGO, and inspect records. This website has been established by Hall Render for payors or other parties to submit a complaint alleging that the parties are not in compliance with the Conditions, which is available for review here.