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Change, Optum push back date of merger to December 2022

by John R. Fischer, Senior Reporter | April 08, 2022
Business Affairs

The Justice Department was said to be mulling over filing a lawsuit to block the deal back in August due to these concerns. This led Change and Optum to sign a timing agreement with the DOJ in which they said they would not complete the merger for 120 days after they have complied with a request for information for further review of the potential deal.

But sources familiar with the matter said back in February when the suit was filed that the department had not found any divestitures to assuage antitrust concerns about the deal.

In its filing, the department said that it agreed that the deal would harm competition in commercial health insurance markets and in the sale of technology used by insurers to process claims and reduce healthcare costs. It reasoned that United would be able to use its rivals’ information to gain an unfair advantage in the health insurance market and process and deny claims.

It also claimed the merger would eliminate United’s only major rival in first-pass claims editing technology, which is used to process health insurance claims to save insurers billions each year. “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,” said Attorney General Merrick B. Garland.

Change and Optum say the Justice Department’s attempt to block their combination is without merit and only delays improvements that they can provide to patients in the health system.

Optum has agreed to pay a $650 million fee to Change should the merger not be completed because of the court’s decision. Change will pay a special cash dividend of $2 per share to its shareholders at or about the time of the closing.

If approved, Optum will buy Change for $8 billion, plus pay off $5 billion in debts it owes.

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