DOJ sues to block Change Healthcare acquisition by UnitedHealth Group

Feb. 25, 2022

The Department of Justice, together with Attorneys General in Minnesota and New York, have filed a civil lawsuit to stop UnitedHealth Group Incorporated from acquiring Change Healthcare Inc. alleging the acquisition use sensitive claims data of hundreds of millions of Americans to reduce competition and innovation to the detriment of health insurance consumers.

The complaint, filed in the U.S. District Court for the District of Columbia, alleges that the proposed $13 billion transaction would harm competition in commercial health insurance markets, as well as in the market for a vital technology used by health insurers to process health insurance claims and reduce healthcare costs.

“Quality health insurance should be accessible to all Americans,” said Attorney General Merrick B. Garland. “If America’s largest health insurer is permitted to acquire a major rival for critical healthcare 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.”

“The proposed transaction threatens an inflection point in the healthcare industry by giving United control of a critical data highway through which about half of all Americans’ health insurance claims pass each year,” said Principal Deputy Assistant Attorney General Doha Mekki of the Justice Department’s Antitrust Division. “Unless the deal is blocked, United stands to see and potentially use its health insurance rivals’ competitively sensitive information for its own business purposes and control these competitors’ access to innovations in vital health care technology. The department’s lawsuit makes clear that we will not hesitate to challenge transactions that harm competition by placing so much control of data and innovation in the hands of a single firm.”

The proposed acquisition would eliminate an independent and innovative firm, Change, that today provides a variety of participants in the healthcare ecosystem, including United’s major health insurance competitors, with vital software and services.

This includes electronic data interchange (EDI) 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.

Indeed, Change markets itself as a valuable partner for insurers, working closely with them to innovate and problem-solve. 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.

DOJ release