AG: Mayo move passes state muster; Albert Lea-Austin realignment legal in terms of state anti-trust law, Swanson says

Published 9:05 am Tuesday, September 12, 2017


Although not popular in Albert Lea, Mayo Clinic Health Systems’ decision to realign its campuses did not violate the state’s anti-trust laws, according to Minnesota Attorney General Lori Swanson.

In a letter to Freeborn County Attorney David Walker, Swanson answered legal queries he posed about the Mayo transition of some services from Albert Lea to Austin. The change has become a hot-button issue among Albert Lea residents.

Swanson said that while lawsuits and injunctions could be sought if the one filing the lawsuit can prove injury of some type, she said a consolidation of services at the Austin campus did not violate antitrust laws.

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Antitrust laws, she said, apply to two competitors; Mayo Health System Austin and Albert Lea is one entity with two campuses. The claim, she said “… has no application to one corporation sorting out the division of labor between two of its divisions.”

Walker’s question about violation of state charities laws in its nonprofit governance and administration of charitable assets has yet to be answered, since Mayo had yet to provide all data requested.

“Nonetheless, based on the information we have received to date, we advised you that we were not aware of any provision of the state charities laws that were violated by the action this organization has proposed,” Swanson said, adding, “in any event, even if the corporate board (of the health system board) did not approve of the reorganization, the Mayo Clinic, as the sole member of the organization, has authority to remove any director who does not approve of such  corporate reorganization.

“I should note that, over the last six weeks, this Office has had a voluminous exchange of phone calls, meetings, and information with you as it relates to this matter. You disagree with our analysis. This Office, however, is required to follow the law. It cannot file a lawsuit simply because a corporation that is abiding by the law undertakes an unpopular action.”

Mayo announced in June the move of inpatient surgeries, intensive care unit and childbirth areas to Austin from its Albert Lea hospital. The childbirth services would be located in a new building, to be constructed adjacent to the Austin hospital in a yet-undisclosed location.

Both the Austin and Albert Lea facilities will continue to provide emergency room, primary and specialty care, pregnancy care, and lab and pharmacy services. Mayo officials cited challenges with staffing shortages, rising costs and declining reimbursements for services.

Since the announcement, a Save Our Hospital group formed in Albert Lea and has mounted protests and enlisted the help of Swanson’s office, legislators and the governor’s office.

In what Swanson described as “alternate avenues of redress” — such as recruiting other health systems to purchase the Albert Lea hospital from Mayo — she recommended that the city and Freeborn County retain a health care finance consultant to review and determine viability of the options.

She also suggested that Walker should contact the Minnesota Department of Health directly on his question about giving notice to the MDH before operations are ended or curtailed.

Walker told the Albert Lea Tribune that antitrust concerns regarding the hospital system are broader than at Albert Lea and Austin hospitals. He said First District Congressman Tim Walz could provide more information on possible antitrust federal violations.

Walker said he is concerned about Mayo buying independent hospitals and then consolidating services while keeping a large enough footprint to prevent a second provider from entering a community.