Contending that the buy would unfairly lock up the Nevada market, the American Medical Association has asked the U.S. Department of Justice to block a planned UnitedHealth Group acquisition. UHG had announced last week that it would acquire Las Vegas, NV-based Sierra Health Services, a $1.7 billion company which operates managed care plans throughout Nevada. The AMA is asking the DOJ to stop $2.6 billion deal, arguing that it would represent an "alarming" consolidation of the state's HMO market. This move is part of a larger campaign by the AMA, which has been sounding the alarm about insurance industry consolidation for some time, arguing that such consolidation severely undercuts physicians' ability to negotiate with health plans.
In its letter to U.S. Attorney General Alberto Gonzalez, the AMA projected that the merger would give UHG 95 percent of the Los Vegas-area HMO market and 78 percent of the Nevada HMO market, giving it an unfair and anticompetitive advantage over doctors, the group contends. UHG, for its part, has argued that the AMA's analysis is flawed. It argues that if other types of insurance products are taken into account, there's plenty of competition in the state.