The U.S. Department of Justice filed suit early Thursday to prevent the $13.8 billion planned merger between the country’s largest health insurer, UnitedHealth Group, and health care tech enterprise Change Healthcare.
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The DOJ was joined in D.C. federal court by the attorneys general of Minnesota and New York, all exclaiming that the deal would harm commercial health insurance competition, specifically the sale of “vital technology” insurers use to process claims and curb healthcare costs.
“As alleged in the complaint, the proposed transaction would give United, a massive company that owns the largest health insurer in the United States, access to a vast amount of its rival health insurers’ competitively sensitive information,” the DOJ said in announcing the suit.
“Post-acquisition, United would be able to use its rivals’ information to gain an unfair advantage and harm competition in health insurance markets,” it said. “The proposed transaction also would eliminate United’s only major rival for first-pass claims editing technology — a critical product used to efficiently process health insurance claims and save health insurers billions of dollars each year — and give United a monopoly share in the market.”
UnitedHealth announced the all-cash deal to merge its Optum unit with Change in January of 2021 as a way to expand its growing pharmacy, healthcare, financial and tech services.
Change Healthcare, which is 20% owned by Blackstone Group, provides billing and payment process services to more than 2,000 payers and 1 million providers.
UnitedHealth said it would appeal the suit, which was filed in the U.S. District Court for the District of Columbia.
“The Department’s deeply flawed position is based on highly speculative theories that do not reflect the realities of the healthcare system. We will defend our case vigorously,” the healthcare organization said in a statement.
Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division said of the suit, “Unless the deal is blocked, United stands to see and potentially use its health insurance rivals’ competitively sensitive information for its own business purposes and control these competitors’ access to innovations in vital health care technology.”
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Source: https://www.law360.com/articles/1468083
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