82_FR_16464 82 FR 16401 - DaVita, Inc., RV Management Corp., Renal Ventures Partners, LLC, Renal Ventures Limited, LLC, and Renal Ventures Management, LLC; Analysis To Aid Public Comment

82 FR 16401 - DaVita, Inc., RV Management Corp., Renal Ventures Partners, LLC, Renal Ventures Limited, LLC, and Renal Ventures Management, LLC; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

Federal Register Volume 82, Issue 63 (April 4, 2017)

Page Range16401-16403
FR Document2017-06556

The consent agreement in this matter settles alleged violations of federal law prohibiting unfair methods of competition. The attached Analysis to Aid Public Comment describes both the allegations in the complaint and the terms of the consent order-- embodied in the consent agreement--that would settle these allegations.

Federal Register, Volume 82 Issue 63 (Tuesday, April 4, 2017)
[Federal Register Volume 82, Number 63 (Tuesday, April 4, 2017)]
[Notices]
[Pages 16401-16403]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-06556]



[[Page 16401]]

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FEDERAL TRADE COMMISSION

[File No. 151 0204]


DaVita, Inc., RV Management Corp., Renal Ventures Partners, LLC, 
Renal Ventures Limited, LLC, and Renal Ventures Management, LLC; 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair methods of competition. 
The attached Analysis to Aid Public Comment describes both the 
allegations in the complaint and the terms of the consent order--
embodied in the consent agreement--that would settle these allegations.

DATES: Comments must be received on or before April 27, 2017.

ADDRESSES: Interested parties may file a comment at https://ftcpublic.commentworks.com/ftc/davitarenalconsent online or on paper, 
by following the instructions in the Request for Comment part of the 
SUPPLEMENTARY INFORMATION section below. Write ``In the Matter of 
DaVita, Inc., RV Management Corp., Renal Ventures Partners, LLC, Renal 
Ventures Limited, LLC, and Renal Ventures Management, LLC., File No. 
151-0204'' on your comment and file your comment online at https://ftcpublic.commentworks.com/ftc/davitarenalconsent by following the 
instructions on the web-based form. If you prefer to file your comment 
on paper, write ``In the Matter of DaVita, Inc., RV Management Corp., 
Renal Ventures Partners, LLC, Renal Ventures Limited, LLC, and Renal 
Ventures Management, LLC., File No. 151-0204'' on your comment and on 
the envelope, and mail your comment to the following address: Federal 
Trade Commission, Office of the Secretary, 600 Pennsylvania Avenue NW., 
Suite CC-5610 (Annex D), Washington, DC 20580, or deliver your comment 
to the following address: Federal Trade Commission, Office of the 
Secretary, Constitution Center, 400 7th Street SW., 5th Floor, Suite 
5610 (Annex D), Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Lisa DeMarchi Sleigh (202-326-2535), 
Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 
20580.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34, 
notice is hereby given that the above-captioned consent agreement 
containing consent orders to cease and desist, having been filed with 
and accepted, subject to final approval, by the Commission, has been 
placed on the public record for a period of thirty (30) days. The 
following Analysis to Aid Public Comment describes the terms of the 
consent agreement, and the allegations in the complaint. An electronic 
copy of the full text of the consent agreement package can be obtained 
from the FTC Home Page (for March 28, 2017), on the World Wide Web, at 
http://www.ftc.gov/os/actions.shtm.
    You can file a comment online or on paper. For the Commission to 
consider your comment, we must receive it on or before April 27, 2017. 
Write ``In the Matter of DaVita, Inc., RV Management Corp., Renal 
Ventures Partners, LLC, Renal Ventures Limited, LLC, and Renal Ventures 
Management, LLC., File No. 151-0204'' on your comment. Your comment--
including your name and your state--will be placed on the public record 
of this proceeding, including, to the extent practicable, on the public 
Commission Web site, at https://www.ftc.gov/policy/public-comments. As 
a matter of discretion, the Commission tries to remove individuals' 
home contact information from comments before placing them on the 
Commission Web site.
    Because your comment will be made public, you are solely 
responsible for making sure that your comment does not include any 
sensitive personal information, like anyone's Social Security number, 
date of birth, driver's license number or other state identification 
number or foreign country equivalent, passport number, financial 
account number, or credit or debit card number. You are also solely 
responsible for making sure that your comment does not include any 
sensitive health information, like medical records or other 
individually identifiable health information. In addition, do not 
include any ``[t]rade secret or any commercial or financial information 
which . . . is privileged or confidential,'' as discussed in Section 
6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 
4.10(a)(2). In particular, do not include competitively sensitive 
information such as costs, sales statistics, inventories, formulas, 
patterns, devices, manufacturing processes, or customer names.
    If you want the Commission to give your comment confidential 
treatment, you must file it in paper form, with a request for 
confidential treatment, and you have to follow the procedure explained 
in FTC Rule 4.9(c), 16 CFR 4.9(c).\1\ Your comment will be kept 
confidential only if the FTC General Counsel, in his or her sole 
discretion, grants your request in accordance with the law and the 
public interest.
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    \1\ In particular, the written request for confidential 
treatment that accompanies the comment must include the factual and 
legal basis for the request, and must identify the specific portions 
of the comment to be withheld from the public record. See FTC Rule 
4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------

    Postal mail addressed to the Commission is subject to delay due to 
heightened security screening. As a result, we encourage you to submit 
your comments online. To make sure that the Commission considers your 
online comment, you must file it at https://ftcpublic.commentworks.com/ftc/davitarenalconsent by following the instructions on the web-based 
form. If this Notice appears at http://www.regulations.gov/#!home, you 
also may file a comment through that Web site.
    If you file your comment on paper, write ``In the Matter of DaVita, 
Inc., RV Management Corp., Renal Ventures Partners, LLC, Renal Ventures 
Limited, LLC, and Renal Ventures Management, LLC., File No. 151-0204'' 
on your comment and on the envelope, and mail your comment to the 
following address: Federal Trade Commission, Office of the Secretary, 
600 Pennsylvania Avenue NW., Suite CC-5610 (Annex D), Washington, DC 
20580, or deliver your comment to the following address: Federal Trade 
Commission, Office of the Secretary, Constitution Center, 400 7th 
Street SW., 5th Floor, Suite 5610 (Annex D), Washington, DC. If 
possible, submit your paper comment to the Commission by courier or 
overnight service.
    Visit the Commission Web site at http://www.ftc.gov to read this 
Notice and the news release describing it. The FTC Act and other laws 
that the Commission administers permit the collection of public 
comments to consider and use in this proceeding as appropriate. The 
Commission will consider all timely and responsive public comments that 
it receives on or before April 27, 2017. You can find more information, 
including routine uses permitted by the Privacy Act, in the 
Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

Analysis of Agreement Containing Consent Order To Aid Public Comment

    The Federal Trade Commission (``Commission'') has accepted, subject 
to final approval, an Agreement Containing Consent Order (``Consent 
Agreement'') from DaVita, Inc. (``DaVita''). The purpose of the Consent

[[Page 16402]]

Agreement is to remedy the anticompetitive effects resulting from 
DaVita's purchase of Renal Ventures Management, LLC from Renal Ventures 
Limited, LLC, which is owned by RV Management Corp. and Renal Ventures 
Partners, LLC (together, ``Renal Ventures''). Under the terms of the 
Consent Agreement, DaVita is required to divest seven dialysis clinics 
in seven markets across the United States.
    The Consent Agreement has been placed on the public record for 30 
days to solicit comments from interested persons. Comments received 
during this period will become part of the public record. After 30 
days, the Commission will again review the Consent Agreement and the 
comments received, and will decide whether it should withdraw from the 
Consent Agreement, modify it, or make final the Decision and Order 
(``Order'').

The Transaction

    Pursuant to an agreement dated August 17, 2015, DaVita proposes to 
acquire all issued and outstanding equity interests in Renal Ventures 
in a transaction valued at approximately $358 million. The Commission's 
Complaint alleges that the proposed acquisition, if consummated, would 
violate Section 7 of the Clayton Act, as amended, 15 U.S.C. 18, and 
Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. 
45, by substantially lessening competition for the provision of 
outpatient dialysis services in seven markets.

The Respondents

    Headquartered in Denver, Colorado, DaVita is the second-largest 
provider of outpatient dialysis services in the United States. DaVita 
operates or manages 2,251 outpatient dialysis clinics in forty-six 
states and the District of Columbia at which approximately 180,000 end 
stage renal disease (``ESRD'') patients receive treatment. In 2015, 
DaVita's revenues were approximately $13.8 billion.
    Renal Ventures, headquartered in Lakewood, Colorado, is a privately 
held company and the seventh-largest provider of outpatient dialysis 
services in the United States. Renal Ventures operates thirty-six 
dialysis centers, providing dialysis services to approximately 2,300 
patients in six states. In 2015, Renal Ventures' revenues were 
approximately $161 million.

The Relevant Product and Structure of the Markets

    Outpatient dialysis services is the relevant product market in 
which to assess the effects of the proposed transaction. For patients 
suffering from ESRD, dialysis treatments are a life-sustaining therapy 
that replaces the function of the kidneys by removing toxins and excess 
fluid from the blood. Kidney transplantation is the only alternative to 
dialysis for ESRD patients. However, the wait-time for donor kidneys--
during which ESRD patients must receive dialysis treatments--can exceed 
five years. Additionally, many ESRD patients are not viable transplant 
candidates. As a result, ESRD patients have no alternative to dialysis 
treatments. Unless hospitalized, ESRD patients must obtain dialysis 
treatments from outpatient dialysis clinics.
    Because most ESRD patients receive outpatient dialysis treatment 
three times per week in sessions lasting between three and five hours 
the relevant geographic markets are local and limited by the travel 
distance from patients' homes. ESRD patients are often very ill and 
suffer from multiple health problems, making travel further than thirty 
miles or thirty minutes very difficult. As a result, competition among 
dialysis clinics occurs at a local level, corresponding to metropolitan 
areas or subsets thereof. The exact contours of each market vary 
depending on traffic patterns, local geography, and the patients' 
proximity to the nearest center.

Competitive Effects of the Acquisition

    Each of the seven geographic markets identified in the Complaint is 
highly concentrated. In each of the affected markets, the proposed 
acquisition would cause the number of providers to drop from three to 
two or cause a merger to monopoly, and the post-acquisition HHI levels 
to exceed 5,000, and in the three-to-two provider markets, changes in 
their HHIs greater than 200. The high post-acquisition concentration 
levels, along with the elimination of the head-to-head competition 
between DaVita and Renal Ventures, suggest the proposed combination 
likely would result in higher prices for outpatient dialysis services 
in each geographic market. In addition, market participants compete for 
patients on a number of quality measures--including quality of 
facilities, wait times, operating hours, and location. The proposed 
combination likely also would result in diminished service and quality 
for patients in each market.

Entry

    Entry into the outpatient dialysis services markets identified in 
the Commission's Complaint is not likely to occur in a timely manner at 
a level sufficient to deter or counteract the likely anticompetitive 
effects of the proposed transaction. By law, each dialysis clinic must 
have a nephrologist medical director, and most dialysis clinics have 
long-term (seven to ten year) contracts with nephrologist medical 
directors, that also include non-competes. As a practical matter, 
medical directors also serve as the primary source of referrals and are 
essential to a clinic's success. The relative shortage and lack of 
available nephrologists, particularly those with an established 
referral stream, is a significant barrier to entry into each of the 
relevant markets. These obstacles make entry in the affected markets 
more challenging and less likely to avert the anticompetitive effects 
of the transaction.

The Consent Agreement

    The Consent Agreement remedies the proposed acquisition's 
anticompetitive effects in seven markets where both DaVita and Renal 
Ventures operate dialysis clinics by requiring DaVita to divest seven 
outpatient dialysis clinics to PDA-GMF Holdco LLP, a joint venture 
between Physicians Dialysis and GMF Capital LLC (``PDA''). Physicians 
Dialysis has been in business since 1990 and currently operates several 
outpatient dialysis clinics. The Commission is satisfied that PDA is a 
qualified acquirer of the divested assets.
    As part of the divestitures, DaVita is required to obtain the 
agreement of the medical director affiliated with each divested clinic 
to continue providing physician services after the transfer of 
ownership to the buyer. Similarly, the Consent Agreement requires 
DaVita to obtain the consent of all lessors necessary to assign the 
leases for the real property associated with the divested clinics to 
the buyer. These provisions ensure that the buyer will have the assets 
necessary to operate the divested clinics in a competitive manner.
    The Consent Agreement contains several additional provisions 
designed to help ensure the continued competitiveness of the divested 
clinics. First, the Consent Agreement provides the buyer with the 
opportunity to interview and hire employees affiliated with the 
divested clinics and prevents DaVita from offering these employees 
incentives to decline the buyer's offer of employment. This helps 
ensure the buyer has access to patient care and supervisory staff 
familiar with the clinics' patients and the local physicians. Second, 
the Consent Agreement prevents DaVita from contracting with the medical 
directors affiliated with the divested clinics for three years, to 
prevent DaVita from

[[Page 16403]]

potentially limiting the competitiveness of the divested clinics. 
Third, to ensure continuity of patient care and records as the buyer 
implements its quality care, billing, and supply systems, the Consent 
Agreement requires DaVita to provide transition services for a period 
up to twenty-four months. Firewalls and confidentiality agreements will 
prevent the exchange of competitively sensitive information. Fourth, 
the Consent Agreement requires DaVita to provide the buyer with a 
license to Renal Ventures' policies, procedures, and medical protocols, 
as well as the option to obtain and use DaVita's medical protocols, 
policies, and procedures, to help with continuity of care for the 
divested clinics' patients.
    The Consent Agreement requires DaVita to provide notice to the 
Commission prior to any acquisitions of dialysis clinics in the markets 
addressed by the Consent Agreement to ensure that subsequent 
acquisitions do not adversely impact competition in those markets or 
undermine the remedial goals of the proposed order. Finally, the 
Consent Agreement allows the Commission to appoint a monitor to oversee 
DaVita's compliance with the Consent Agreement.
    The purpose of this analysis is to facilitate public comment on the 
Consent Agreement, and it is not intended to constitute an official 
interpretation of the proposed Decision and Order, or to modify its 
terms in any way.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 2017-06556 Filed 4-3-17; 8:45 am]
 BILLING CODE 6750-01-P



                                                                                    Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Notices                                                      16401

                                                    FEDERAL TRADE COMMISSION                                consent agreement containing consent                  4.9(c).1 Your comment will be kept
                                                                                                            orders to cease and desist, having been               confidential only if the FTC General
                                                    [File No. 151 0204]
                                                                                                            filed with and accepted, subject to final             Counsel, in his or her sole discretion,
                                                    DaVita, Inc., RV Management Corp.,                      approval, by the Commission, has been                 grants your request in accordance with
                                                    Renal Ventures Partners, LLC, Renal                     placed on the public record for a period              the law and the public interest.
                                                    Ventures Limited, LLC, and Renal                        of thirty (30) days. The following                       Postal mail addressed to the
                                                    Ventures Management, LLC; Analysis                      Analysis to Aid Public Comment                        Commission is subject to delay due to
                                                    To Aid Public Comment                                   describes the terms of the consent                    heightened security screening. As a
                                                                                                            agreement, and the allegations in the                 result, we encourage you to submit your
                                                    AGENCY:    Federal Trade Commission.                    complaint. An electronic copy of the                  comments online. To make sure that the
                                                    ACTION:   Proposed consent agreement.                   full text of the consent agreement                    Commission considers your online
                                                                                                            package can be obtained from the FTC                  comment, you must file it at https://
                                                    SUMMARY:   The consent agreement in this                Home Page (for March 28, 2017), on the                ftcpublic.commentworks.com/ftc/
                                                    matter settles alleged violations of                                                                          davitarenalconsent by following the
                                                                                                            World Wide Web, at http://www.ftc.gov/
                                                    federal law prohibiting unfair methods                                                                        instructions on the web-based form. If
                                                                                                            os/actions.shtm.
                                                    of competition. The attached Analysis to                                                                      this Notice appears at http://
                                                                                                               You can file a comment online or on
                                                    Aid Public Comment describes both the                                                                         www.regulations.gov/#!home, you also
                                                                                                            paper. For the Commission to consider
                                                    allegations in the complaint and the                                                                          may file a comment through that Web
                                                                                                            your comment, we must receive it on or
                                                    terms of the consent order—embodied                                                                           site.
                                                                                                            before April 27, 2017. Write ‘‘In the
                                                    in the consent agreement—that would                                                                              If you file your comment on paper,
                                                                                                            Matter of DaVita, Inc., RV Management
                                                    settle these allegations.                                                                                     write ‘‘In the Matter of DaVita, Inc., RV
                                                                                                            Corp., Renal Ventures Partners, LLC,
                                                    DATES: Comments must be received on                     Renal Ventures Limited, LLC, and Renal                Management Corp., Renal Ventures
                                                    or before April 27, 2017.                               Ventures Management, LLC., File No.                   Partners, LLC, Renal Ventures Limited,
                                                    ADDRESSES: Interested parties may file a                151–0204’’ on your comment. Your                      LLC, and Renal Ventures Management,
                                                    comment at https://                                     comment—including your name and                       LLC., File No. 151–0204’’ on your
                                                    ftcpublic.commentworks.com/ftc/                         your state—will be placed on the public               comment and on the envelope, and mail
                                                    davitarenalconsent online or on paper,                  record of this proceeding, including, to              your comment to the following address:
                                                    by following the instructions in the                    the extent practicable, on the public                 Federal Trade Commission, Office of the
                                                    Request for Comment part of the                         Commission Web site, at https://                      Secretary, 600 Pennsylvania Avenue
                                                    SUPPLEMENTARY INFORMATION section                       www.ftc.gov/policy/public-comments.                   NW., Suite CC–5610 (Annex D),
                                                    below. Write ‘‘In the Matter of DaVita,                 As a matter of discretion, the                        Washington, DC 20580, or deliver your
                                                    Inc., RV Management Corp., Renal                        Commission tries to remove individuals’               comment to the following address:
                                                    Ventures Partners, LLC, Renal Ventures                                                                        Federal Trade Commission, Office of the
                                                                                                            home contact information from
                                                    Limited, LLC, and Renal Ventures                                                                              Secretary, Constitution Center, 400 7th
                                                                                                            comments before placing them on the
                                                    Management, LLC., File No. 151–0204’’                                                                         Street SW., 5th Floor, Suite 5610
                                                                                                            Commission Web site.
                                                    on your comment and file your                                                                                 (Annex D), Washington, DC. If possible,
                                                                                                               Because your comment will be made
                                                    comment online at https://                                                                                    submit your paper comment to the
                                                                                                            public, you are solely responsible for
                                                    ftcpublic.commentworks.com/ftc/                                                                               Commission by courier or overnight
                                                                                                            making sure that your comment does
                                                    davitarenalconsent by following the                                                                           service.
                                                                                                            not include any sensitive personal
                                                                                                                                                                     Visit the Commission Web site at
                                                    instructions on the web-based form. If                  information, like anyone’s Social
                                                                                                                                                                  http://www.ftc.gov to read this Notice
                                                    you prefer to file your comment on                      Security number, date of birth, driver’s
                                                                                                                                                                  and the news release describing it. The
                                                    paper, write ‘‘In the Matter of DaVita,                 license number or other state
                                                                                                                                                                  FTC Act and other laws that the
                                                    Inc., RV Management Corp., Renal                        identification number or foreign country
                                                                                                                                                                  Commission administers permit the
                                                    Ventures Partners, LLC, Renal Ventures                  equivalent, passport number, financial
                                                                                                                                                                  collection of public comments to
                                                    Limited, LLC, and Renal Ventures                        account number, or credit or debit card
                                                                                                                                                                  consider and use in this proceeding as
                                                    Management, LLC., File No. 151–0204’’                   number. You are also solely responsible
                                                                                                                                                                  appropriate. The Commission will
                                                    on your comment and on the envelope,                    for making sure that your comment does
                                                                                                                                                                  consider all timely and responsive
                                                    and mail your comment to the following                  not include any sensitive health
                                                                                                                                                                  public comments that it receives on or
                                                    address: Federal Trade Commission,                      information, like medical records or
                                                                                                                                                                  before April 27, 2017. You can find
                                                    Office of the Secretary, 600                            other individually identifiable health
                                                                                                                                                                  more information, including routine
                                                    Pennsylvania Avenue NW., Suite CC–                      information. In addition, do not include
                                                                                                                                                                  uses permitted by the Privacy Act, in
                                                    5610 (Annex D), Washington, DC 20580,                   any ‘‘[t]rade secret or any commercial or
                                                                                                                                                                  the Commission’s privacy policy, at
                                                    or deliver your comment to the                          financial information which . . . is
                                                                                                                                                                  http://www.ftc.gov/ftc/privacy.htm.
                                                    following address: Federal Trade                        privileged or confidential,’’ as discussed
                                                    Commission, Office of the Secretary,                    in Section 6(f) of the FTC Act, 15 U.S.C.             Analysis of Agreement Containing
                                                    Constitution Center, 400 7th Street SW.,                46(f), and FTC Rule 4.10(a)(2), 16 CFR                Consent Order To Aid Public Comment
                                                    5th Floor, Suite 5610 (Annex D),                        4.10(a)(2). In particular, do not include                The Federal Trade Commission
                                                    Washington, DC 20024.                                   competitively sensitive information                   (‘‘Commission’’) has accepted, subject to
                                                    FOR FURTHER INFORMATION CONTACT: Lisa                   such as costs, sales statistics,                      final approval, an Agreement
                                                    DeMarchi Sleigh (202–326–2535),                         inventories, formulas, patterns, devices,             Containing Consent Order (‘‘Consent
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    Bureau of Competition, 600                              manufacturing processes, or customer                  Agreement’’) from DaVita, Inc.
                                                    Pennsylvania Avenue NW., Washington,                    names.                                                (‘‘DaVita’’). The purpose of the Consent
                                                    DC 20580.                                                  If you want the Commission to give
                                                    SUPPLEMENTARY INFORMATION: Pursuant                     your comment confidential treatment,                     1 In particular, the written request for confidential

                                                    to Section 6(f) of the Federal Trade                    you must file it in paper form, with a                treatment that accompanies the comment must
                                                                                                            request for confidential treatment, and               include the factual and legal basis for the request,
                                                    Commission Act, 15 U.S.C. 46(f), and                                                                          and must identify the specific portions of the
                                                    FTC Rule 2.34, 16 CFR 2.34, notice is                   you have to follow the procedure                      comment to be withheld from the public record. See
                                                    hereby given that the above-captioned                   explained in FTC Rule 4.9(c), 16 CFR                  FTC Rule 4.9(c), 16 CFR 4.9(c).



                                               VerDate Sep<11>2014   16:21 Apr 03, 2017   Jkt 241001   PO 00000   Frm 00068   Fmt 4703   Sfmt 4703   E:\FR\FM\04APN1.SGM   04APN1


                                                    16402                           Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Notices

                                                    Agreement is to remedy the                              assess the effects of the proposed                    likely anticompetitive effects of the
                                                    anticompetitive effects resulting from                  transaction. For patients suffering from              proposed transaction. By law, each
                                                    DaVita’s purchase of Renal Ventures                     ESRD, dialysis treatments are a life-                 dialysis clinic must have a nephrologist
                                                    Management, LLC from Renal Ventures                     sustaining therapy that replaces the                  medical director, and most dialysis
                                                    Limited, LLC, which is owned by RV                      function of the kidneys by removing                   clinics have long-term (seven to ten
                                                    Management Corp. and Renal Ventures                     toxins and excess fluid from the blood.               year) contracts with nephrologist
                                                    Partners, LLC (together, ‘‘Renal                        Kidney transplantation is the only                    medical directors, that also include non-
                                                    Ventures’’). Under the terms of the                     alternative to dialysis for ESRD patients.            competes. As a practical matter, medical
                                                    Consent Agreement, DaVita is required                   However, the wait-time for donor                      directors also serve as the primary
                                                    to divest seven dialysis clinics in seven               kidneys—during which ESRD patients                    source of referrals and are essential to a
                                                    markets across the United States.                       must receive dialysis treatments—can                  clinic’s success. The relative shortage
                                                      The Consent Agreement has been                        exceed five years. Additionally, many                 and lack of available nephrologists,
                                                    placed on the public record for 30 days                 ESRD patients are not viable transplant               particularly those with an established
                                                    to solicit comments from interested                     candidates. As a result, ESRD patients                referral stream, is a significant barrier to
                                                    persons. Comments received during this                  have no alternative to dialysis                       entry into each of the relevant markets.
                                                    period will become part of the public                   treatments. Unless hospitalized, ESRD                 These obstacles make entry in the
                                                    record. After 30 days, the Commission                   patients must obtain dialysis treatments              affected markets more challenging and
                                                    will again review the Consent                           from outpatient dialysis clinics.                     less likely to avert the anticompetitive
                                                    Agreement and the comments received,                       Because most ESRD patients receive                 effects of the transaction.
                                                    and will decide whether it should                       outpatient dialysis treatment three times
                                                                                                            per week in sessions lasting between                  The Consent Agreement
                                                    withdraw from the Consent Agreement,
                                                    modify it, or make final the Decision                   three and five hours the relevant                        The Consent Agreement remedies the
                                                    and Order (‘‘Order’’).                                  geographic markets are local and limited              proposed acquisition’s anticompetitive
                                                                                                            by the travel distance from patients’                 effects in seven markets where both
                                                    The Transaction                                         homes. ESRD patients are often very ill               DaVita and Renal Ventures operate
                                                       Pursuant to an agreement dated                       and suffer from multiple health                       dialysis clinics by requiring DaVita to
                                                    August 17, 2015, DaVita proposes to                     problems, making travel further than                  divest seven outpatient dialysis clinics
                                                    acquire all issued and outstanding                      thirty miles or thirty minutes very                   to PDA–GMF Holdco LLP, a joint
                                                    equity interests in Renal Ventures in a                 difficult. As a result, competition among             venture between Physicians Dialysis
                                                    transaction valued at approximately                     dialysis clinics occurs at a local level,             and GMF Capital LLC (‘‘PDA’’).
                                                    $358 million. The Commission’s                          corresponding to metropolitan areas or                Physicians Dialysis has been in business
                                                    Complaint alleges that the proposed                     subsets thereof. The exact contours of                since 1990 and currently operates
                                                    acquisition, if consummated, would                      each market vary depending on traffic                 several outpatient dialysis clinics. The
                                                    violate Section 7 of the Clayton Act, as                patterns, local geography, and the                    Commission is satisfied that PDA is a
                                                    amended, 15 U.S.C. 18, and Section 5 of                 patients’ proximity to the nearest center.            qualified acquirer of the divested assets.
                                                    the Federal Trade Commission Act, as                                                                             As part of the divestitures, DaVita is
                                                                                                            Competitive Effects of the Acquisition                required to obtain the agreement of the
                                                    amended, 15 U.S.C. 45, by substantially
                                                    lessening competition for the provision                    Each of the seven geographic markets               medical director affiliated with each
                                                    of outpatient dialysis services in seven                identified in the Complaint is highly                 divested clinic to continue providing
                                                    markets.                                                concentrated. In each of the affected                 physician services after the transfer of
                                                                                                            markets, the proposed acquisition                     ownership to the buyer. Similarly, the
                                                    The Respondents                                         would cause the number of providers to                Consent Agreement requires DaVita to
                                                       Headquartered in Denver, Colorado,                   drop from three to two or cause a merger              obtain the consent of all lessors
                                                    DaVita is the second-largest provider of                to monopoly, and the post-acquisition                 necessary to assign the leases for the
                                                    outpatient dialysis services in the                     HHI levels to exceed 5,000, and in the                real property associated with the
                                                    United States. DaVita operates or                       three-to-two provider markets, changes                divested clinics to the buyer. These
                                                    manages 2,251 outpatient dialysis                       in their HHIs greater than 200. The high              provisions ensure that the buyer will
                                                    clinics in forty-six states and the District            post-acquisition concentration levels,                have the assets necessary to operate the
                                                    of Columbia at which approximately                      along with the elimination of the head-               divested clinics in a competitive
                                                    180,000 end stage renal disease                         to-head competition between DaVita                    manner.
                                                    (‘‘ESRD’’) patients receive treatment. In               and Renal Ventures, suggest the                          The Consent Agreement contains
                                                    2015, DaVita’s revenues were                            proposed combination likely would                     several additional provisions designed
                                                    approximately $13.8 billion.                            result in higher prices for outpatient                to help ensure the continued
                                                       Renal Ventures, headquartered in                     dialysis services in each geographic                  competitiveness of the divested clinics.
                                                    Lakewood, Colorado, is a privately held                 market. In addition, market participants              First, the Consent Agreement provides
                                                    company and the seventh-largest                         compete for patients on a number of                   the buyer with the opportunity to
                                                    provider of outpatient dialysis services                quality measures—including quality of                 interview and hire employees affiliated
                                                    in the United States. Renal Ventures                    facilities, wait times, operating hours,              with the divested clinics and prevents
                                                    operates thirty-six dialysis centers,                   and location. The proposed combination                DaVita from offering these employees
                                                    providing dialysis services to                          likely also would result in diminished                incentives to decline the buyer’s offer of
                                                                                                                                                                  employment. This helps ensure the
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                    approximately 2,300 patients in six                     service and quality for patients in each
                                                    states. In 2015, Renal Ventures’                        market.                                               buyer has access to patient care and
                                                    revenues were approximately $161                                                                              supervisory staff familiar with the
                                                                                                            Entry                                                 clinics’ patients and the local
                                                    million.
                                                                                                              Entry into the outpatient dialysis                  physicians. Second, the Consent
                                                    The Relevant Product and Structure of                   services markets identified in the                    Agreement prevents DaVita from
                                                    the Markets                                             Commission’s Complaint is not likely to               contracting with the medical directors
                                                      Outpatient dialysis services is the                   occur in a timely manner at a level                   affiliated with the divested clinics for
                                                    relevant product market in which to                     sufficient to deter or counteract the                 three years, to prevent DaVita from


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                                                                                    Federal Register / Vol. 82, No. 63 / Tuesday, April 4, 2017 / Notices                                           16403

                                                    potentially limiting the competitiveness                Relief (PEPFAR); GH17–003,                            (OMB) for review and approval in
                                                    of the divested clinics. Third, to ensure               Conducting Public Health Research in                  accordance with the Paperwork
                                                    continuity of patient care and records as               South Africa; and GH17–004,                           Reduction Act of 1995. The notice for
                                                    the buyer implements its quality care,                  Conducting Public Health Research                     the proposed information collection is
                                                    billing, and supply systems, the Consent                Activities in Egypt.                                  published to obtain comments from the
                                                    Agreement requires DaVita to provide                       Times and Dates: 9:00 a.m.–2:00 p.m.,              public and affected agencies.
                                                    transition services for a period up to                  EDT, April 25, 2017 (Closed), 9:00 a.m.–                 Written comments and suggestions
                                                    twenty-four months. Firewalls and                       2:00 p.m., EDT, April 26, 2017 (Closed).              from the public and affected agencies
                                                    confidentiality agreements will prevent                    Place: Teleconference.                             concerning the proposed collection of
                                                    the exchange of competitively sensitive                    Status: The meeting will be closed to              information are encouraged. Your
                                                    information. Fourth, the Consent                        the public in accordance with                         comments should address any of the
                                                    Agreement requires DaVita to provide                    provisions set forth in Section                       following: (a) Evaluate whether the
                                                    the buyer with a license to Renal                       552b(c)(4) and (6), Title 5 U.S.C., and               proposed collection of information is
                                                    Ventures’ policies, procedures, and                     the Determination of the Director,                    necessary for the proper performance of
                                                    medical protocols, as well as the option                Management Analysis and Services                      the functions of the agency, including
                                                    to obtain and use DaVita’s medical                      Office, CDC, pursuant to Public Law 92–               whether the information will have
                                                    protocols, policies, and procedures, to                 463.                                                  practical utility; (b) Evaluate the
                                                    help with continuity of care for the                       Matters for Discussion: The meeting                accuracy of the agencies estimate of the
                                                    divested clinics’ patients.                             will include the initial review,                      burden of the proposed collection of
                                                       The Consent Agreement requires                       discussion, and evaluation of                         information, including the validity of
                                                    DaVita to provide notice to the                         applications received in response to                  the methodology and assumptions used;
                                                    Commission prior to any acquisitions of                 ‘‘Program Development and Research to                 (c) Enhance the quality, utility, and
                                                    dialysis clinics in the markets addressed               Establish and Evaluate Innovative and                 clarity of the information to be
                                                    by the Consent Agreement to ensure that                 Emerging Best Practices in Clinical and               collected; (d) Minimize the burden of
                                                    subsequent acquisitions do not                          Community Services through the                        the collection of information on those
                                                    adversely impact competition in those                   President’s Emergency Plan for AIDS                   who are to respond, including through
                                                    markets or undermine the remedial                       Relief (PEPFAR), FOA GH17–002;                        the use of appropriate automated,
                                                    goals of the proposed order. Finally, the               ‘‘Conducting Public Health Research in                electronic, mechanical, or other
                                                    Consent Agreement allows the                            South Africa’’, FOA GH17–003,; and                    technological collection techniques or
                                                    Commission to appoint a monitor to                      ‘‘Conducting Public Health Research                   other forms of information technology,
                                                    oversee DaVita’s compliance with the                    Activities in Egypt’’, FOA GH17–004.                  e.g., permitting electronic submission of
                                                    Consent Agreement.                                         Contact Person for More Information:               responses; and (e) Assess information
                                                       The purpose of this analysis is to                                                                         collection costs.
                                                                                                            Hylan Shoob, Scientific Review Officer,
                                                    facilitate public comment on the                                                                                 To request additional information on
                                                                                                            Center for Global Health (CGH) Science
                                                    Consent Agreement, and it is not                                                                              the proposed project or to obtain a copy
                                                                                                            Office, CGH, CDC, 1600 Clifton Road,
                                                    intended to constitute an official                                                                            of the information collection plan and
                                                                                                            NE., Mailstop D–69, Atlanta, Georgia
                                                    interpretation of the proposed Decision                                                                       instruments, call (404) 639–7570 or
                                                                                                            30033, Telephone: (404) 639–4796.
                                                    and Order, or to modify its terms in any                                                                      send an email to omb@cdc.gov. Written
                                                                                                               The Director, Management Analysis
                                                    way.                                                                                                          comments and/or suggestions regarding
                                                                                                            and Services Office, has been delegated
                                                      By direction of the Commission.                       the authority to sign Federal Register                the items contained in this notice
                                                    Donald S. Clark,                                        notices pertaining to announcements of                should be directed to the Attention:
                                                    Secretary.                                              meetings and other committee                          CDC Desk Officer, Office of Management
                                                    [FR Doc. 2017–06556 Filed 4–3–17; 8:45 am]              management activities, for both the                   and Budget, Washington, DC 20503 or
                                                                                                            Centers for Disease Control and                       by fax to (202) 395–5806. Written
                                                    BILLING CODE 6750–01–P
                                                                                                            Prevention and the Agency for Toxic                   comments should be received within 30
                                                                                                            Substances and Disease Registry.                      days of this notice.
                                                    DEPARTMENT OF HEALTH AND                                Elaine L. Baker,
                                                                                                                                                                  Proposed Project
                                                    HUMAN SERVICES                                          Director, Management Analysis and Services              Mobile Messaging Intervention to
                                                                                                            Office Centers for Disease Control and                Present New HIV Prevention Options for
                                                    Centers for Disease Control and
                                                                                                            Prevention.                                           Men Who have Sex with Men (MSM)
                                                    Prevention
                                                                                                            [FR Doc. 2017–06537 Filed 4–3–17; 8:45 am]            Study—New—National Center for HIV/
                                                    Disease, Disability, and Injury                         BILLING CODE 4163–18–P                                AIDS, Viral Hepatitis, STD, and TB
                                                    Prevention and Control Special                                                                                Prevention (NCHHSTP), Centers for
                                                    Emphasis Panel (SEP): Initial Review                                                                          Disease Control and Prevention (CDC).
                                                                                                            DEPARTMENT OF HEALTH AND                              Background and Brief Description
                                                      In accordance with Section 10(a)(2) of                HUMAN SERVICES
                                                    the Federal Advisory Committee Act                                                                              Public health approaches to HIV
                                                    (Pub. L. 92–463), the Centers for Disease               Centers for Disease Control and                       prevention and control are increasingly
                                                    Control and Prevention (CDC)                            Prevention                                            complex for men who have sex with
                                                    announces a meeting for the initial                                                                           men (MSM), a population with a
asabaliauskas on DSK3SPTVN1PROD with NOTICES




                                                                                                            [30Day–17–17AX]                                       disproportionately high burden of HIV
                                                    review of applications in response to
                                                    Funding Opportunity Announcement                        Agency Forms Undergoing Paperwork                     infection. In addition to the established
                                                    (FOA) GH17–002, Program                                 Reduction Act Review                                  biomedical treatments for HIV-positive
                                                    Development and Research to Establish                                                                         MSM, and behavioral strategies to
                                                    and Evaluate Innovative and Emerging                      The Centers for Disease Control and                 reduce the risk of transmitting or
                                                    Best Practices in Clinical and                          Prevention (CDC) has submitted the                    contracting HIV, current
                                                    Community Services through the                          following information collection request              recommendations incorporate the
                                                    President’s Emergency Plan for AIDS                     to the Office of Management and Budget                breakthrough biomedical risk reduction


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Document Created: 2017-04-03 23:53:21
Document Modified: 2017-04-03 23:53:21
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionProposed consent agreement.
DatesComments must be received on or before April 27, 2017.
ContactLisa DeMarchi Sleigh (202-326-2535), Bureau of Competition, 600 Pennsylvania Avenue NW., Washington, DC 20580.
FR Citation82 FR 16401 

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