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Court Issues Final Consent Judgment On United-Sierra Acquisition

Oct.16.2008

On September 24, 2008, the federal district in Washington, D.C. entered a final consent judgment resolving antitrust allegations concerning UnitedHealth Group's acquisition of Sierra Health Services. Consistent with the judgment's terms, United had already divested its individual Medicare Advantage product line in the Las Vegas, Nevada area shortly after the acquisition closed earlier this year.

The court rejected arguments by the American Medical Association and the Service Employees International Union, submitted under the Tunney Act review process for antitrust consent decrees, that the consent judgment was inadequate and that they should be permitted to present further evidence to the court in additional hearings. The judge ruled that the divestiture requirements of the consent judgment sufficiently addressed the Department of Justice's complaint allegation that the acquisition would harm competition in an alleged Medicare Advantage market. As for the objectors' claims that the acquisition would create undue power for United in the purchase of health care providers' services and in the sale of commercial health insurance products in Las Vegas, the court explained that its review of the consent judgment's adequacy "is limited to the scope of the complaint" and that the Department of Justice had not alleged such harms in its complaint. In oral argument, the court also noted that the Nevada Insurance Commissioner and the Nevada Attorney General also did not challenge the merger on those grounds. Crowell & Moring partner Art Lerner represented United and Sierra in the court's Tunney Act review of the proposed final judgment.

After entry of the judgment in Washington, D.C., the federal district court in Las Vegas, Nevada on October 8, 2008 approved a similar stipulated final judgment resolving allegations by the Nevada Attorney General concerning alleged loss of competition in Medicare Advantage products.

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