Colorado Politics

Weiser intervenes in DaVita-UnitedHealth deal

Colorado Attorney General Phil Weiser used federal antitrust law in a bid to ensure that the $4.3 billion acquisition of Denver-based DaVita’s medical-clinic division by a unit of UnitedHealth Group doesn’t harm Medicare customers in Colorado Springs and Teller County.

Weiser — a former senior antitrust official in the U.S. Department of Justice — announced a settlement with the two companies on Wednesday morning.

DaVita Inc. agreed in December 2017 to sell its DaVita Medical Group division to Optum, a unit of UnitedHealth, while retaining its core kidney-dialysis business. The deal was supposed to close last year but it wasn’t completed until hours after Weiser’s announcement of the settlement.

Weiser had seen the deal as potentially combining control of a significant chunk of the market and yielding anticompetitive practices. He challenged the purchase in El Paso County District Court.

DaVita Medical Group owns two large physicians’ groups in Colorado Springs, while Optum already 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.

> RELATED: DaVita’s politically active Thiry stepping down as CEO after 20 years

“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.”

The two parties consented to mandates to ensure competitiveness, including UnitedHealth agreeing to suspend its exclusive contract with Centura Health for at least 3.5 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.

Following the purchase, DaVita Medical Group will become part of OptumCare, serving a combined 16 million patients.

DaVita said Wednesday in an email statement that it “pleased to have reached an agreement with the Colorado attorney general’s office.”

Matthew Stearns, a UnitedHealth spokesman in Washington, D.C., 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 purchase 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.”

DaVita Inc. and its kidney-care business will continue as a separate Denver-based company.

Kent Thiry, who has been active in Colorado political causes while leading DaVita, stepped down as CEO on June 1 but stayed on as executive chairman. Javier Rodriguez, who had led DaVita’s core kidney-dialysis business since March 2014, succeeded Thiry as CEO.

Colorado Attorney General Phil Weiser heads into a Feb. 19 news conference.
David Zalubowski, AP – file
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