DOJ sues UnitedHealth for proposed $13.8B acquisition of health tech company

The US Department of Justice (DOJ), along with Attorneys General in Minnesota and New York, filed a suit Thursday before the US District Court for the District of Columbia against a proposed $13 billion transaction between UnitedHealth Group, which owns the largest health insurer in the country, and Change, a leading healthcare technology company providing analytics, software, and data services.

The complaint alleges the acquisition would harm competition in commercial health insurance markets and restrict competitors’ access to innovations in health care technology. UnitedHealth would enjoy an unfair advantage by gaining access to an enormous amount of sensitive information from its rival health insurers.

Change is the only major rival against UnitedHealth’s first-pass claims editing technology, which allows efficient processing of health insurance claims, the DoJ also alleges that the transaction would grant UnitedHealth a monopoly in the market for a vital technology. The complaint states that since profits in health insurance markets are significantly larger than the profits in the first-pass claims editing market, UnitedHealth has an incentive to raise prices for its rival insurers, leading to health insurers and customers facing higher prices, lower quality, and reduced access to claims-editing innovations.

Doha Mekki, the Principal Deputy Assistant Attorney General of the DoJ’s Antitrust Division, cautioned that the “proposed transaction threatens an inflection point in the health care industry by giving United control of a critical data highway through which about half of all Americans’ health insurance claims pass each year”

The suit asks the court to decree the proposed acquisition illegal in terms of Section 7 of the Clayton Act and to enjoin the defendants from consummating it.