A federal judge denied the Department of Justice’s attempt to block UnitedHealth Group's $13 billion purchase of Change Healthcare, delivering a win on Monday to the healthcare giant as its reach continues to expand.
Judge Carl Nichols’ ruling follows an August bench trial in which the DOJ argued that UnitedHealth’s bid for Change would disadvantage rivals and result in higher costs, lower quality and less innovative commercial health insurance for Americans.
Nichols’ Monday opinion was placed under seal as it “may contain competitively sensitive information,” meaning that his explanation behind the decision to allow the deal is blocked from public view.
“We are pleased with the decision and 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,” UnitedHealth said in a statement provided to Healthcare Dive.
It’s unclear whether the DOJ will appeal.
“We respectfully disagree with the court’s decision and are reviewing the opinion closely to evaluate next steps,” Assistant Attorney General Jonathan Kanter said in a statement.
UnitedHealth’s reach touches nearly every corner of the health sector. It operates one of the nation’s largest health insurance companies and filled more than 1 billion prescriptions last year through its pharmacy benefit manager. It also owns physician groups and surgery centers.
UnitedHealth announced last year that it had inked a deal to buy Change Healthcare, which would provide a key opportunity to leverage insights from billions of healthcare claims, the two said.
Healthcare providers use Change's technology to submit claims to health insurers, who also use the technology to evaluate and process these claims.
The DOJ argued that UnitedHealth would have access to technologies that its rivals rely on to compete with United, according to the complaint filed in federal court in February.
“Change’s technologies save United’s rivals tens of billions of dollars each year and reduce healthcare costs for American families,” the complaint alleged.
With Change, regulators argued UnitedHealth would have access to vast amounts of competitively sensitive data about its rivals.
To ease some of the antitrust concerns, UnitedHealth said it would sell Change’s claims payment and editing business to private equity firm TPG Capital.
Nichols, a President Donald Trump appointee, ordered UnitedHealth to divest ClaimsXten to TPG Capital as proposed.
Concerned with the pace of consolidation, President Joe Biden promised to get tough on healthcare mergers and issued an executive order last year for regulators to “review and revise” merger guidelines.
Change Healthcare shares were trading up Tuesday morning following the news.