Payers, Health Services

UnitedHealth’s $4.3B DaVita Medical acquisition wins conditional FTC approval

The effort by the nation’s largest insurer to become the nation’s largest employer of clinicians received FTC approval with an agreement to divest some of the company’s holdings in the Las Vegas area to address antitrust issues. 

Vector illustration of Approved green ink stamp

UnitedHealth Group’s $4.3 billion acquisition of Denver-based Davita Medical Group has received provisional clearance by the Federal Trade Commission after being held up in regulatory red tape for more than a year.

The effort by the nation’s largest insurer to become the nation’s largest employer of clinicians received FTC approval with an agreement to divest some of the company’s holdings in the Las Vegas area to address antitrust issues.

As part of the settlement with the FTC, UnitedHealth will sell off DaVita Medical Group’s Las Vegas-based subsidy HealthCare Partners of Nevada to Intermountain Healthcare.

Without the divestment, UnitedHealth through OptumCare and Healthcare Partners of Nevada would result in a near-monopoly in the market for Medicare Advantage plans and managed care services provided to MA members.

Along with the sale, UnitedHealth agreed to provide transition assistance to Intermountain Healthcare, which will divest its minority stake in P3 Health Partners.

Colorado Attorney General Phil Weiser took independent action against the companies on anti-competitive grounds.

Weiser negotiated a consent judgement with UnitedHealth and DaVita Medical to address antitrust concerns by having the insurer lift its exclusive Centennial, Colorado-based Centura Health for at least 3.5 years and extending the existing agreement between DaVita Medical and Humana until at least the end of 2020.

“As the People’s Lawyer, I am committed to protecting all Coloradans from anticompetitive consolidation and practices, and will do so whether or not the federal government acts to protect Coloradans,” Weiser said in a statement.

The deal to purchase the medical group of the dialysis provider was first announced in 2017 and the companies agreed to a $560 million discount from the initial $4.9 billion price-tag to speed along the regulatory process.

The companies received approval from the California Department of Managed Health Care last year.

UnitedHealth has been ramping up its provider business line through its subsidiary OptumCare, which directly employs or is affiliated with more than 30,000 physicians.

With the Davita Medical acquisition, OptumCare will serve more than 80 health plans and will provide care to a combined 16 million patients, according to UnitedHealth.

“We are excited to take this important step in building a next-generation comprehensive, coordinated health care organization. Together we will improve patient health and experiences while lowering costs across the continuum of care – including primary, specialty, urgent and surgical care,” Optum CEO Andrew Witty said in a statement.

Photo: Thomas Pajot, Getty Images