DOJ Files Lawsuit to Block UnitedHealth, Change Healthcare Merger

The Department of Justice (DOJ) has filed a civil lawsuit to block the merger between UnitedHealth Group and Change Healthcare.

The complaint states that the proposed $13 billion transaction in which UnitedHealth Group planned to acquire Change Healthcare would harm competition in the commercial health insurance market and the healthcare technology market.

“Quality health insurance should be accessible to all Americans. 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,” Attorney General Merrick B. Garland, said in the press release.

“The Justice Department is committed to challenging anticompetitive mergers, particularly those at the intersection of health care and data.”

According to the lawsuit, the acquisition would give major payer UnitedHealth Group access to rival payer information, giving UnitedHealth Group an unfair market advantage. The healthcare merger would also eliminate UnitedHealth Group’s only significant rival for first-pass claims editing technology, meaning that the payer would develop a monopoly share in the market.

The proposed merger would also eradicate Change Healthcare as an independent firm that provides software and services to a handful of payers and healthcare stakeholders, according to DOJ.

Change Healthcare offers services that streamline claims management processes, including electronic data interchange clearinghouse services and first-pass claims editing solutions.

“United’s acquisition of this neutral player would allow United to tilt the playing field in its favor, harming current competition and allowing United to control and distort the course of innovation in this industry for the foreseeable future,” the press release stated.

UnitedHealth Group first announced plans for its diversified health services company Optum to acquire Change Healthcare in January 2021. The payer aimed to leverage Change Healthcare’s technology capabilities to facilitate healthcare data exchange, reduce administrative waste, and streamline payment processes.

The DOJ first expressed concern about the acquisition in March 2021 and filed a review of the deal.

In August 2021, the American Hospital Association (AHA) also cited antitrust concerns about the merger in a letter to the DOJ Antitrust Division. The trade association also applauded DOJ for the recent ruling.

“The American Hospital Association commends the Department of Justice for its efforts to protect patients and providers, including hospitals and health systems, from United HealthGroup’s attempt to acquire Change Healthcare,” Melinda Hatton, general counsel of AHA, said in a statement.

“The AHA urged DOJ’s Antitrust Division to conduct a thorough investigation of the proposed transaction because of its anticompetitive potential to “produce a massive consolidation of competitively sensitive health care data” under UHG’s exclusive control.”

“We warned repeatedly “the combination of the parties' data sets would impact (and likely distort) decisions about patient care and claims processing and denials to the detriment of consumers and health care providers….” Challenging this proposed combination was the right thing to do to prevent untold competitive harm for patients and health care providers.”

Update 2/25/2022: This article has been updated to include a statement from the American Hospital Association.