UnitedHealth’s battle over $13B merger begins
The trial to decide if UnitedHealth Group will be allowed to pursue its $13 billion acquisition of Change Healthcare is underway.
UnitedHealth Group’s Optum, the technology-enabled health services business of UnitedHealth Group, announced its intent to acquire Change Healthcare, a healthcare technology company that provides data and analytics-driven solutions, at the start of 2021, but the proposed merger was quickly under fire from regulators. The deal brings together Change Healthcare’s platform with OptumInsight to provide software and data analytics, technology-enabled services and research, advisory and revenue cycle management offerings.
In February 2022, the Justice Department announced it was suing to block the merger, citing that the proposed $13 billion merger would harm competition in commercial health insurance markets and technology market used by health insurers to process claims and reduce healthcare costs.
“Quality health insurance should be accessible to all Americans,” Attorney General Merrick B. Garland said in a statement at the time. “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 healthcare and data.”
With the ongoing legal battle, Optum and Change Healthcare extended their agreement to December 31, 2022.
“The extended agreement reflects our firm belief in the potential of our combination to improve health care, and in our commitment to contesting the meritless legal challenge to this merger,” the companies said in a joint statement at the time.
Also in April, Optum announced it would sell Change Healthcare’s claims editing business (“ClaimsXten”) to an affiliate of TPG Capital for $2.2 billion.
The American Hospital Association (AHA) urged the DOJ to investigate the deal and has expressed its concern about its anti competitive impact.
The trial over the proposed merger began August 1 in federal court in Washington, D.C. The lawsuit is in line with the Biden administration’s interest in cracking down on monopolies. In this case healthcare data is squarely at the center. The “antitrust showdown” comes as UnitedHealth has continued to grow over the past several years with limited antitrust pushback, The Wall Street Journal reported.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."