Colorado Attorney General Phil Weiser used federal antitrust law to ensure that the $4.3 billion acquisition of Denver-based DaVita’s medical-clinic division Wednesday by a unit of UnitedHealth Group doesn’t harm Medicare patients in Colorado Springs and Teller County.
United Healthcare’s Optum unit completed its acquisition of DaVita Medical Group, which became part of a group called OptumCare that serves more than 80 health plans and will provide care to 16 million patients.
DaVita, which retained its core kidney-dialysis business, agreed to the deal in December 2017. The transaction was delayed over antitrust concerns.
Optum CEO Andrew Witty said in a news release Wednesday that the company is “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.”
Weiser saw the deal as potentially combining control of a significant chunk of the market and yielding anticompetitive practices. He challenged the merger in El Paso County District Court.
DaVita Medical Group owned two large physicians’ groups in Colorado Springs, while Optum is the largest company serving Medicare Advantage plans.
DaVita bought Colorado Springs Health Partners in 2015 and Mountain View Medical Group in 2017, giving DaVita practices that now have 180 doctors, physician assistants, nurse practitioners and nurses and 630 other employees in 20 locations serving nearly 170,000 patients, making it the largest local medical practice. The two practices operate under separate management.
Those who rely on Medicare Advantage plans were most at risk by the acquisition, Weiser said Wednesday in announcing a settlement between the two companies and his office. Weiser is a former senior antitrust official in the U.S. Department of Justice.
“If left unchecked, the merger could result in reduced competition, higher health care costs, reduced benefits, and fewer choices for seniors,” he said in a statement.
“At the Attorney General’s Office, we are charged with protecting consumers and enforcing the antitrust laws to prevent just such harms. We are taking action today to protect older Coloradans from increased prices and decreased options in health care.”
In a judgment being filed Wednesday, the two parties consented to mandates to ensure competitiveness, including UnitedHealth agreeing to suspend its exclusive contract with Centura Health for at least 3½ years. Weiser’s office said that would expand the network of health care providers for those using Medicare Advantage plans.
DaVita Medical Group would continue to use Humana, a competitor of UnitedHealth, in Colorado Springs, through 2020.
DaVita said Wednesday in an email statement that it is “pleased to have reached an agreement with the Colorado Attorney General’s Office.”
Matthew Stearns, a UnitedHealth spokesman, said the company is “deferring” its comment to DaVita Medical Group.
The Attorney General’s Office said the U.S. Federal Trade Commission investigated the merger but did not step in to protect the companies’ Colorado customers.
“I recognize that this case marks an important step in state antitrust enforcement,” Weiser stated. “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.”
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