Dialysis giant DaVita is lowering the price of its Medical Group to UnitedHealth Group's Optum unit to $4.3 billion, DaVita officials announced in a Securities and Exchange Commission filing on Monday.
DaVita and UnitedHealth originally agreed to a sale price of $4.9 million for DaVita Medical Holdings.
But officials said they were reducing the price because of underlying business performance, as well as an effort to speed up Federal Trade Commission approval—the final OK needed from regulators—for the deal. In November, California regulators gave their blessing to the transaction.
The new figure reduces the purchase agreement from $73.5 million to $65.1 million. It also cuts DaVita’s aggregate liability for losses arising out of or resulting from claims from $367.5 million to $325.5 million.
DaVita Medical Group operates nearly 300 medical clinics that provide primary and specialist care to approximately 1.7 million patients per year. The group also operates 35 urgent care centers and six outpatient surgery centers.
Last December, it was first announced UnitedHealth’s Optum unit would acquire DaVita's medical group, one of the nation’s biggest, for $4.9 billion in cash. The company announced that DaVita Medical Group will join Optum’s physician-led primary, specialty, in-home, urgent- and surgery-care delivery services business.
But the deal has hit some holdups. In March, DaVita and OptumHealth disclosed that the FTC requested more information from DaVita per the Hart-Scott-Rodino Antitrust Act.
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In October, DaVita's medical care group agreed to pay $270 million to resolve claims against that its medical group provided inaccurate information that caused Medicare Advantage plans to receive inflated Medicare payments. They said the funds would be paid out of escrow funds it required HealthCare Partners' former owners to set aside when it acquired the group. According to the DOJ, DaVita voluntarily disclosed problematic practices of HealthCare Partners after it discovered those practices caused its Medicare Advantage Organizations to submit incorrect diagnostic codes to the Centers for Medicare & Medicaid Services and obtain inflated payments.
DaVita and UnitedHealth had said they expected the deal to close by the end of the year, but now expect it to be finalized in the first quarter of 2019.