United-Rocky merger

Monday, March 20, 2017 12:29 PM

Colorado insurance commissioner approves UnitedHealthcare acquisition of Rocky Mountain Health Plans

by Kate Alfano, CMS Communications Coordinator

Insurance Commissioner Marguerite Salazar approved UnitedHealthcare’s acquisition of Rocky Mountain Health Plans in early February. “This deal will allow Rocky to continue to serve Coloradans, particularly on the Western Slope,” Salazar said in a news release. “I want to thank all of the organizations that submitted comments on this matter. These served to inform my decision, and are reflected in the final approval order.”

Colorado Medical Society President Katie Lozano, MD, FACR, submitted a letter to Commissioner Salazar on Jan. 3 and CMS President-elect Robert Yakely, MD, testified before the Colorado Division of Insurance on Jan. 10 to encourage the commissioner to strengthen the acquisition agreement to protect patients, engage physicians and practices on the Western Slope, ensure a smooth transition for the management team, and hold United accountable to its promises to apply Rocky’s best practices in the future. The final proposal addresses virtually all the conditions recommended by CMS, and CMS leaders expressed approval of the physician leaders initially chosen to serve on the provider advisory committee.

“While the decision to establish the advisory committee is not legally binding, the CMS Board of Directors views the proposal as an act of good faith from an organization (RMHP) that has a long history of collaboration with the medical communities on the Western Slope and across Colorado.”

The final agreement includes the following conditions.

• Protecting consumers - The commissioner ordered that the costs of this transaction cannot be passed on to Colorado consumers as higher premiums.
• Continue to expand access to care and service - United shall continue Rocky’s work to provide and improve access to health coverage for Colorado consumers, especially on the state’s Western Slope, and continue in that market for at least five years.
 
• Community support - United shall continue to support community benefits in Western Colorado for three years at Rocky’s current level of support (up to $500,000 per year).
• Conversion approval - The transaction also required the approval by the Colorado attorney general of the conversion of Rocky Mountain HMO from a non-profit to a for-profit corporation.  That approval was issued on Thursday, Feb. 9.

The acquisition process began in August 2016 when the parties submitted an application for this transaction to the insurance commissioner. In the ensuing months, the commissioner requested additional information from United and Rocky, including a competitive impact analysis.  Also as part of this process, the Colorado Center on Law and Policy, the Colorado Consumer Health Initiative and CMS submitted comments and recommendations concerning the acquisition. The public hearing was held in Grand Junction on Jan. 10, 2017. 

As part of the process, the Division of Insurance concluded that the transaction would not substantially lessen competition in Colorado, nor tend toward a monopoly, and that, after the transaction, Rocky would meet the DOI’s financial requirements for a health insurance carrier.