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The US Department of Justice sued to block UnitedHealth Group $13 billion proposed acquisition of health IT company Change Healthcare on Thursday, just three days before the healthcare companies promised to complete the deal.
Regulators wrote that UnitedHealth Group’s proposed acquisition of data broker Change Healthcare would give its health insurance arm sensitive information on what its competitor insurers pay providers, allowing them to undercut rivals on price.
UnitedHealth Group will defend its case vigorously, a spokesperson wrote in an email.
“Change Healthcare and Optum together can increase efficiency and reduce friction in healthcare, producing a better experience and lower costs,” the spokesperson said. “The department’s deeply flawed position is based on highly speculative theories that do not reflect the realities of the healthcare system .”
The Justice Department said because Change operates the largest claims clearinghouse in the nation—transmitting more than 14 billion transactions annually—the transaction could allow UnitedHealth Group to raise the price for this service, thereby increasing the amount of competitors insurers must pay to process their payments to clinicians.
“The proposed acquisition would also allow United to use its control over Change’s technologies to disadvantage its health insurance rivals by raising their costs and denying or delaying their access to innovations and quality improvements to products and services supplied by Change,” the lawsuit says.
UnitedHealth Group announced its plan to purchase Change Healthcare last March, with the aim of adding the company to its Optum health services and provider division. In the year since the deal was announced, hospital, pharmacy and antitrust advocates spoke out against the acquisition, saying that it would ultimately create a monopoly for Change Healthcare’s services and raise costs for providers, pharmacists and consumers.
To appease critics and regulators, UnitedHealth Group and Change Healthcare teased divesting certain parts of their business, with UnitedHealth Group saying it could divest up to $650 million worth of assets, and Change reportedly looking to offload its $1 billion payment integrity operation.
The companies last week said they planned to finalize the deal by this Sunday. They initially expected to close it before the end of 2021.
Change Healthcare did not respond immediately to a request for comment.
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