DOJ Sues to Block UnitedHealth / Change Healthcare Deal

Data continues to play key role in fight against anticompetitive mergers.

Citing its potential to abuse the health insurance claims data it would amass, and consequences for consumers, federal and state attorneys have sued to block UnitedHealth Group, Inc.’s $13 billion acquisition of Change Healthcare Inc.

The Department of Justice and attorneys general in Minnesota and New York said in their complaint that the acquisition would harm competition in commercial health insurance markets and in the market for a vital technology used by health insurers to process claims and reduce healthcare costs. The suit was filed in U.S. District Court for the District of Columbia.

Subsidiaries of Minnesota-headquartered UnitedHealth Group include UnitedHealthcare, the nation’s largest health insurer; Optum Health, a large network of healthcare providers located throughout the country; OptumRx, a large pharmacy benefit manager; and OptumInsight, a healthcare technology business.

Change Healthcare, based in Tennessee, is a leading independent healthcare technology company providing healthcare analytics, software, services and data to healthcare providers, health insurers and other software and services firms in the healthcare industry. They serve many companies in the healthcare industry, including UnitedHealth’s health insurance competitors. Change Healthcare provides electronic data interchange clearinghouse services, which transmit claims and payment information between insurers and providers, and first-pass claims editing solutions, which review claims under the health insurer’s policies and relevant treatment protocols.

In announcing the suit, Attorney General Merrick B. Garland said, “If America’s largest health insurer is permitted to acquire a major rival for critical health care claims technologies, it will undermine competition for health insurance and stifle innovation in the employer health insurance markets. The Justice Department is committed to challenging anticompetitive mergers, particularly those at the intersection of health care and data.”

Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division added that, if allowed, the deal would give UnitedHealth its rivals’ competitively sensitive information. This would also give the company access to its competitors’ healthcare technology innovations. Mekki said DOJ will challenge transactions that place “so much control of data and innovation in the hands of a single firm.”

UnitedHealth’s revenues were $288 billion in 2021. Change Healthcare’s revenues were $3.4 billion.

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