UnitedHealth Group, Change Healthcare $8 billion deal beats justice suit to block

September 21, 2022
by Thomas Dworetzky, Contributing Reporter
The U.S. Justice Department lost its effort to block the January UnitedHealth Group $8 billion deal to buy Change Healthcare.

U.S. Judge Carl Nichols ruled Monday that he would deny the government's request to stop the deal, as long as the companies went ahead with the $2.2 billion sale of Change subsidiary ClaimsXten to a private equity concern, according to CNBC.

Bloomberg cited the PE firm as being TPG Capital. It noted that the Trump-appointed Nichols was keeping the legal reasoning behind the decision sealed, as “it may contain competitively sensitive information.”

The judicial move is seen as a blow to the administration's antitrust efforts. DOJ had filed the lawsuit in February 2022, over fears that it would give UnitedHealth, the country's biggest health insurer, “access to its competitors' data and ultimately push up healthcare costs,” according to Reuters.

DOJ's lead antitrust official, Jonathan Kanter, told the news agency that Justice is "reviewing the opinion closely to evaluate next steps." A major concern of the DOJ was that the pair's competing software applications for healthcare claim processing were used by “38 of the top-40 health insurers in the country,” according the U.S News.

“We respectfully disagree with the court’s decision and are reviewing the opinion closely to evaluate next steps. Protecting competition and access to affordable healthcare is of the utmost importance to the Antitrust Division and the Department of Justice. We are grateful to the Antitrust Division staff — the attorneys, economists, paralegals, and administrative professionals — who work tirelessly to uphold the value of competition,” Kanter said in a DOJ statement.

UnitedHealth Group was “pleased” by the court's decision, stating that it now would “look forward to combining with Change Healthcare as quickly as possible so that together we can continue our work to make the health system work better for everyone."

The all-cash deal was first announced in January 2021.

Concerns then arose from competitors and the DOJ that delayed the deal back in December 2021. At that time, Change Healthcare reported the delay of the closing in a change in a filing with the Securities and Exchange Commission. It said it received a written notice from UnitedHealth this month that it was “exercising its unilateral right to extend the outside date” of the merger plan and agreement to April 5, 2022,” according to an HCB News report at the time.

This isn't the only move by the healthcare giant. Earlier in September, UnitedHealth Group teamed up with Walmart to expand value-based care models to hundreds of thousands of seniors and Medicare beneficiaries.

As part of the 10-year partnership, the two will begin their work at 15 Walmart Health locations in Florida and Georgia in January 2023, HCB News reported.

“This collaboration puts the patient at the center of healthcare by leveraging the strength and complementary skill sets of our two companies to accelerate access to quality care,” said Doug McMillon, chief executive officer of Walmart, in a statement.