Wednesday, November 28, 2018

 

DMHC Approves Optum’s Acquisition of DaVita​

California Department of Managed Health Care (DMHC) Director Shelley Rouillard approved Optum, Inc.’s acquisition of DaVita Health Plan of California.

“Over the past few years, there has been rapid consolidation in the health care industry including health plan mergers. As the primary state regulator of health plans, our job is to protect the health care rights of impacted enrollees and ensure a stable health care delivery system," said DMHC Director Rouillard. "The Department’s approval of this merger includes several conditions that will protect enrollees and support behavioral health services.”

Per the DMHC’s approval, Optum and DaVita agree to not increase premiums as a result of acquisition costs, and keep premium rate increases to a minimum. The plans also agree to invest at least $58 million in California. This includes:

  • $40 million in philanthropic activities in California.
  • $10 million to one or more areas that include support for scholarships through the United Health Foundation Diverse Scholars Initiative, medical grants for California families, investments to help address social determinants of health and other health and wellness initiatives. 
  • $8 million to support behavioral health services by providing scholarships to those seeking to become a psychiatrist or psychiatric nurse practitioner in the field of Child and Adolescent Psychiatry.

The health plans will also support activities and implement programs to help address the opioid crisis. This includes educating providers on substance abuse detection and prescribing naloxone and buprenorphine.

The DMHC’s full conditions to the transaction are available here.

DaVita filed notice of the proposed acquisition by Optum with the DMHC on January 9, 2018. The Department conducted a comprehensive review of the transaction to ensure compliance with the Knox-Keene Act, the body of law that regulates health plans in California. The DMHC examined both parties’ organizational and corporate structures, administrative capacity changes, health care delivery system changes, product or subscriber changes, the effect of the transaction on the financial viability of DMHC licensed plans, the financing for the transaction, and its impact on consumers.

The DMHC held a public meeting on April 9, 2018 regarding the acquisition. The meeting provided an opportunity for members of the public to comment and allowed representatives from the plans to publicly explain the transaction.

About DMHC:

The DMHC protects the health care rights of approximately 26 million Californians and ensures a stable health care delivery system. The Department has helped more than 2 million Californians resolve health plan problems through the Help Center. Information and assistance are available at www.HealthHelp.ca.gov or by calling 1-888-466-2219.

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