DOJ has eye on UnitedHealth's $8 billion acquisition of Change Healthcare
The Department of Justice considering a lawsuit to intervene in UnitedHealth’s purchase sources say.
UnitedHealth Group’s nearly $8 billion acquisition of Change Healthcare is coming under scrutiny by the Biden administration, several media sources reported. UnitedHealth announced early this year that it would purchase the revenue management company for $7.84 billion in cash and $5 billion in debt.
The U.S. Department of Justice is considering a lawsuit to block the purchase of the health care analytics and technology vendor. Industry analysts said this would be the latest sign that the administration is aggressively pursuing antitrust enforcement. Several state attorneys general have expressed concerns about the transaction, and the DOJ has been looking for sworn witness testimony for the potential trial, “The Information” reported.
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A UnitedHealth spokesperson declined to answer questions about its response to the potential suit or how it could affect the timeline of the deal. But despite the stricter DOJ review, the two companies said earlier this year they still expected the deal to close in the second half of 2021. In the merger agreement, UnitedHealth said it would be open to divesting assets if required for approval, although it noted such divestitures couldn’t account for more than $650 million in annual revenue, which would be a “burdensome condition.”
The American Hospital Association in March called on the DOJ to give the merger a rigorous review, because the deal — meant to beef up UnitedHealth’s data analytics arm OptumInsight — also could result in less competition for health IT and revenue cycle management services. It also alleged it would give UnitedHealth’s payer business an unfair edge in contract negotiations with hospitals.
The AHA also expressed concern that the deal could result in a massive consolidation of health care data under UnitedHealth, which could distort decisions about patient care, claims processing and denials. Currently, Change, as an independent alternative to Optum serves as a check against those outcomes, it said.
In response to the concerns, UnitedHealth has maintained Optum’s and UnitedHealthcare’s operations are kept separate.
“With distinct and complementary capabilities, this combination will help health care providers and payers better serve patients by more effectively connecting and simplifying key clinical, administrative and payment processes to the benefit of the health system and the people we serve,” an Optum spokesperson told “Healthcare Dive.”
Change management did not take questions from investors during a recent call about its first-quarter results, citing the pending acquisition. However, the Nashville-based health IT company’s stock took a nosedive following the news, dropping roughly 7% in morning trading.
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