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FTC orders UnitedHealth to divest healthcare firm for $4.34B DaVita deal

UnitedHealth Group Inc. will divest DaVita Medical Group's healthcare provider organization to Intermountain Healthcare Inc. at the behest of the U.S. Federal Trade Commission.

The FTC flagged the healthcare provider organization as an area of overlap in UnitedHealth's $4.34 billion acquisition of DaVita Inc.'s DaVita Medical Group, which closed in June.

Specifically, the agency said the acquisition will likely harm competition in healthcare markets in Nevada's Clark and Nye counties. Concerns about the overlap were originally raised via a complaint in June, suggesting that the merger would likely reduce competition in the markets for managed care provider organization services sold to Medicare Advantage insurers and Medicare Advantage plans sold to individual Medicare Advantage members.

The complaints alleged that the acquisition would have positioned UnitedHealth to raise the costs of its managed care provider organization services to rival Medicare Advantage insurers or even withhold such services from these rivals.

Under the FTC's order, UnitedHealth has 40 days after the acquisition's closing to divest DaVita Medical Group's healthcare provider organization in the Las Vegas area.

The FTC approved the order with a 4-1 vote, in which FTC Chairman Joseph Simons recused himself.