Change Healthcare May Sell Assets to Prepare for UHG Merger

Change Healthcare is considering selling its payment integrity business, ClaimsXten, to prepare for its upcoming merger with UnitedHealth Group.

ClaimsXten is a payment solution that aims to help payers optimize claims payment accuracy, reduce unnecessary medical costs and system development costs, streamline the claims adjudication process, enable payment innovation, and improve claims editing.

The software brings in between $130 and $150 million in annual EBITDA. Change Healthcare is working with advisers to potentially sell investments of the solution, which could generate more than $1 billion, according to anonymous Bloomberg sources.

It is not definite that the company will reach an agreement and finalize the asset sales at an amount that could pass the regulatory hurdles, the sources said. Bloomberg did not receive any comments from the companies involved. 

UnitedHealth Group first announced that its health services company Optum planned to acquire Change Healthcare in January 2021. The acquisition would be worth $8 billion and Optum planned to purchase Change Healthcare’s stock at $25.75 per share in cash.

With the merger, the companies aimed to ease clinicians’ workflows and healthcare data exchange, reduce administrative waste, and streamline payment processes.

The deal was expected to close in 2021, but UnitedHealth Group recently pushed the deadline to April 2022.

The acquisition hit a roadblock when the Antitrust Division of the Department of Justice (DOJ) filed a review in March 2021, allowing regulators to extend the 30-day waiting period. Both companies cooperated with the DOJ’s request for additional information.

The American Hospital Association (AHA) voiced its concern and requested a federal investigation into the merge. The organization stated that the acquisition would reduce competition and concentrate a large volume of data in the hands of one health insurance company.

Later in the year, AHA penned a letter to the Antitrust Division of the DOJ, further insisting that the merger would hurt competition in the health IT services sphere and lead to higher prices. The organization said that the merging of UnitedHealth Group and Change Healthcare’s datasets could have a negative impact on patient care, claims processing, and denials.

Following the DOJ review, UnitedHealth Group and Change Healthcare crafted an amended agreement that stated that the companies can sell assets if required for approval, according to a regulatory filing from Change Healthcare.