State officials air concerns over Sierra Health buyout

Some high-profile Nevada officials weighed in Monday on a proposed merger between Sierra Health Services and UnitedHealth Group.

Representatives of the Nevada attorney general’s office and the state Assembly expressed concerns about the $2.6 billion buyout two days before public comments on the deal were set to resume.

The attorney general’s Bureau of Consumer Protection filed comments with the Nevada Division of Insurance asserting that UnitedHealth’s acquisition of Sierra Health “may result in the most concentrated insurance market in the country.”

The bureau added that the hearings scheduled through Friday might not offer consumers and other interested groups enough opportunity to comment on the deal, and asked for permission to file additional public remarks through Sept. 25.

The agency’s filing said the attorney general’s office has not made a formal decision on the case.

But the bureau cited numbers from the American Medical Association and the federal Department of Health and Human Services that show the combined entity would hold a big share of some segments of the state’s health-insurance business. The two companies, for example, cover 96 percent of Clark County residents enrolled in Medicare Advantage plans.

The deal could also affect the price and availability of Medicaid health insurance the state provides to low-income children, pregnant women, disabled adults and seniors, the bureau stated. Sierra provides 55 percent of Medicaid services and 66 percent of Nevada Check-Up services in Southern Nevada so if the merger results in higher premiums or canceled coverage, consumers insured through state programs could suffer.

“The attorney general is very concerned that health care costs for consumers, especially consumers enrolled in HMOs in this state, may rise as a result of the merger, and strongly urges the parties and the Division of Insurance to take all actions to ensure that this does not occur, including structural remedies,” the filing said.

The consumer advocacy bureau said it was concerned particularly about reimbursements to doctors and hospitals falling below competitive levels; monopoly power that would result in doctors leaving the combined companies’ provider network and even the state; and “unjustifiable” price increases in co-pays, premiums and prescription drugs, as well as significant reductions in benefits.

Peter O’Neill, Sierra Health’s vice president of investor and public relations, said company officials will address the consumer advocate’s concerns directly in this week’s hearings.

The hearings begin Wednesday in Elko, continue Thursday in Reno and finish Friday in Las Vegas, where the meeting will begin at 9:30 a.m. inside the Sawyer Building, 555 E. Washington Ave.

Also Monday, Nevada Assembly Speaker Barbara Buckley, D-Las Vegas, and Assemblywoman Susan Gerhardt, D-Henderson, released a joint statement saying they planned to comment Friday in Las Vegas on the buyout.

Buckley said she would ask how the merger will affect the cost of health insurance, and how it might influence hospital contracts, physician reimbursements and other “quality of care factors.”

She pointed to the American Medical Association’s concerns about the combined companies covering more than 90 percent of the Las Vegas HMO market and “having a total monopoly in some rural counties.”

Gerhardt, who is vice chairwoman of the Assembly’s Health and Human Services Committee, noted that Nevada has one of the nation’s highest rates of uninsured residents, and she said she wants to ensure that progress the state Legislature has made in extending health coverage to children, pregnant women and employees of small businesses continues post-buyout.

The Clark County Medical Society, the Nevada State Medical Association and the American Medical Association have all released statements opposing UnitedHealth’s acquisition of Sierra Health.

Representatives of the Nevada Development Authority and nonprofit Three Square have said they approve of the deal.

As of Friday, 16 people had registered with the Nevada Division of Insurance to speak at the Las Vegas session. The deadline to sign up was Monday.

At a June 14 hearing, about 30 people, including doctors, community activists and medical patients, registered to comment on the deal.

Supporters said the sale would give Sierra Health members a national provider network and more product lines.

Those opposed said the buyout would create a statewide health-insurance monopoly that would reduce competition and hurt the quality of care the two companies’ insureds receive.

In addition to getting the nod from Nevada insurance officials, the buyout must also pass muster with regulators at the federal Department of Justice and in California and Texas.

Shares in Sierra Health fell 11 cents, or 0.26 percent, Monday to close at $41.58 on the New York Stock Exchange.

UnitedHealth is offering $43.50 a share for the company.