The Competition and Markets Authority (CMA) has been forced to admit it got the biggest outcome of its inquiry into the private healthcare market wrong, An exclusive report from COVER sister title WSB has revealed.
As a result of an order by the Competition Appeal Tribunal (CAT), the CMA has been forced to quash a finding that there was insufficient private hospital competition in London and its subsequent ruling that hospitals should be sold.
The CMA's final report, its first action as a body, was published in April and found that hospital group HCA was charging higher prices for treatments in central London.
As a result the regulator ordered it to sell either London Bridge and Princess Grace hospitals or the Wellington Hospital including the Wellington Hospital Platinum Medical Centre.
HCA immediately issued a notice that it would be launching a legal challenge - which it has now successfully completed.
The hospital group's appeal hung on the pricing analysis undertaken by the regulator - a process it claimed was at fault.
After the final report was published, the tribunal ordered the CMA to grant HCA's advisers access to certain econometric analysis it had undertaken. HCA's advisers found errors in the insured pricing analysis which formed part of the evidence base for the competition finding.
The CMA admitted its mistake and following the correction of the data will re-consider the finding in this context and if any remedy is necessary.
It said: "The CMA has accepted that as a result of certain errors identified by HCA's advisers, it made a procedural error by not re-consulting with HCA on its insured pricing analysis, which the CMA had revised following an earlier consultation during the investigation.
"The CMA submitted to the CAT that the most appropriate course of action would be for the matter to be remitted to it to consider further representations on the insured pricing analysis."
It was a similar issue in the provisional findings which led to a legal challenge by BMI Healthcare and resulted in the hospital group not being forced to sell any of its facilities in the final report.
HCA had asked for the remitted decisions to be decided by another body, but this was refused by the tribunal, although it did order the CMA to pay some of HCA's legal costs in the incident.
The ruling will also delay some of the associated challenges.
There will be a hearing at the CAT for the separate challenges by Axa PPP and the Federation of Independent Practitioner Organisations on 23 January.
The CAT's ruling does not have any effect on the remainder of the CMA's final report.
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