Department Of Justice Blocks UnitedHealth Takeover Of Change Healthcare

(RTTNews) - The Department of Justice has filed lawsuit to arbitrate in UnitedHealth Group's acquisition of Change Healthcare, just days before the company's planned consummation date on February 27.

In its statement, the Department of Justice said that the deal would impact competition in commercial health markets and also affect the the market for technology, which insurers use to process claims and reduce healthcare costs. The deal is valued at $8 billion in cash and $5 billion in debt. The complaint was filed on Thursday in the US District Court for the District of Columbia.

Commenting on the developments, Attorney General Merrick Garland said, "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. The Justice Department is committed to challenging anti-competitive mergers, particularly those at the intersection of health care and data."

The DOJ had said in the lawsuit that the merger would give UnitedHealth Group, the parent company of the country's largest commercial insurer, UnitedHealthcare, easy access to lot of data on its competitors' sensitive information. This could be used to the company's benefit and it can easily leave its only major rival far behind. The DOJ said that Change Healthcare projects itself as a valuable partner to insurers, and its merger into UnitedHealth would eliminate a neutral party in the market. Once the acquisition is complete, UnitedHealth plans to fold Change into its Optum subsidiary.

United Healthcare said in a statement, "Change Healthcare and Optum together can increase efficiency and reduce friction in health care, producing a better experience and lower costs. The Department's deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system. We will defend our case vigorously."

After agreeing to complete the deal in February-end, UnitedHealth and Change said last week that they planned to finish off the merger on Feb. 27, setting a deadline for DOJ to intervene.

With the deal fast becoming a reality, organizations such as the American Hospital Association have urged the Department of Justice to follow all the rules and regulations.