The Justice Department on Thursday filed a lawsuit against UnitedHealth Group over its planned acquisition of Change Healthcare, arguing that joining the two companies would harm competition in the commercial health market. In addition, the DOJ said the deal, if approved, would hurt the technology market, which insurers rely on to process claims and reduce health care costs. Suit.
These companies initially announcing a merger In January 2021, the deal was worth $13 billion.In March of that year, the Department of Justice open an investigation. Later in November, UnitedHealth and Change said they Meet the requirements of a DOJ investigation And agreed to delay the merger until February 22, unless the DOJ concludes its investigation.change healthcare said last week Unless the Justice Department takes action, the merger will end on February 27, and it does.
“If the largest U.S. health insurer were allowed to acquire a major competitor in key health care claims technology, it would undermine competition in health insurance and stifle innovation in the employer health insurance market,” Attorney General Merrick B. Garland said in the announcement. litigation. “The Department of Justice is committed to challenging anticompetitive mergers, especially those at the intersection of healthcare and data.”
The complaint includes several reasons for blocking the merger. First, the Justice Department argued that allowing the merger would give UnitedHealth an unfair advantage by gaining access to an unfair number of competitors’ sensitive data. The data could effectively eliminate UnitedHealth Group’s only major competitor in first-pass claims editing technology.
Specifically, the lawsuit states:
United’s proposed acquisition of Change would also eliminate fierce competition between United and Change to provide first-pass claims editing solutions, the software and services health insurers use to help adjudicate claims. Today, United and Change are competing to provide health insurers with a first-pass claims editing solution.
Doha Maki, the principal deputy assistant attorney general for the Justice Department’s antitrust division, paints an even more dire picture of what would happen if the two were allowed to merge.
“The proposed deal threatens an inflection point in the healthcare industry by giving the U.S. control of a critical data highway that accounts for about half of Americans each year,” said Doha Mekki, the Justice Department’s principal deputy assistant attorney general. Health insurance claims go through this highway.” The Antitrust Division in the lawsuit. “Unless the deal is blocked, United will see and may use competitively sensitive information of its Medicare competitors for its own business purposes and control those competitors’ access to important healthcare technology innovations,” the department’s lawsuit said. Make it clear that we will not hesitate to challenge deals that harm competition by handing control of so much data and innovation to one company.”
Because Change is marketed as a valuable partner to insurers, it would no longer be a neutral player in the market if acquired by UnitedHealth, the Justice Department said in the lawsuit. UnitedHealth has expressed interest in merging its Optum subsidiary with Change if the acquisition goes ahead as expected by the end of the month.
Change and UnitedHealth said last week that the deal is expected to be finalized on Feb. 27, prompting the Justice Department to act. A Change Healthcare spokesperson provided the following statement in an email:
“We know and are disappointed that the Department of Justice has filed a lawsuit to prevent Change Healthcare from completing its merger with UHG. As we previously disclosed, UHG has extended our merger agreement until April 5, 2022. We will continue to support UHG has worked hard to complete the merger as we comply with our obligations under the merger agreement.”
Photo: Andrei Popov, Getty Images
Update: This article has been updated with comments from Change Healthcare.
