Physicians Seek To Block UnitedHealth Expansion

The American Medical Association on Monday asked the Department of Justice to block a proposed acquisition of Nevada-based Sierra Health by Minnesota-based UnitedHealth Group, Bloomberg/Los Angeles Times reports (Bloomberg/Los Angeles Times, 3/20).

UnitedHealth last week announced an agreement to acquire Sierra Health for $2.6 billion in an effort to expand operations in the West and Medicare business. Under the agreement, UnitedHealth would acquire Sierra for $43.50 per share in cash. UnitedHealth would obtain 56% of the health insurance market in Las Vegas and 43% of the market in Nevada through the acquisition (California Healthline, 3/13).

According to AMA, UnitedHealth would obtain 95% of the HMO market in Las Vegas and 78% of the market in Nevada through the acquisition.

In a letter to Attorney General Alberto Gonzales, AMA said that the share of the HMO market UnitedHealth would hold and "United's well-documented single-minded focus on profits should raise major red flags" about the leverage the company would have in negotiations on reimbursements to physicians in Nevada.

AMA board member James Rohack said, "The proposed merger would have negative long-term consequences for patients, physicians, hospitals and employers."

UnitedHealth said that the acquisition would provide Nevada residents with access to affordable health care services and a broader network of physicians and hospitals.

DOJ spokeswoman Gina Talamona did not confirm receipt of the letter from AMA but said the department has begun a review of the acquisition (AP/Hartford Courant, 3/20).