- UnitedHealth is planning to sell Change Healthcare's claims payment and editing business to private equity firm TPG Capital for $2.2 billion, according to a Friday filing with the SEC, in a bid to ease antitrust concerns dogging the UnitedHealth-Change merger.
- The sale of ClaimsXten is contingent on UnitedHealth completing its planned acquisition of data analytics company Change, the filing said.
- UnitedHealth's health services arm, Optum, expected to close its $13 billion acquisition of Change earlier this year, but the Department of Justice halted the deal in February, citing anticompetitive concerns.
UnitedHealth has maintained that joining Optum and Change, two of the biggest providers of health IT services like revenue cycle management in the U.S., will result in a more connected administrative and payment ecosystem across healthcare. But after the deal was announced early last year, hospital and pharmacy groups swiftly came out against the merger, arguing it would result in fewer choices for services.
Hospital lobby the American Hospital Association also argued bringing Change under the umbrella of UnitedHealth, which also owns the biggest private payer in the country, UnitedHealthcare, could distort decisions about patient care, claims processing and denials at the expense of hospitals.
The DOJ halted the deal in February, giving UnitedHealth and Change until April 5 to walk from the deal or continue to pursue a merger in court. The companies elected for the latter option, with sources telling Bloomberg that Change was exploring a potential sale of ClaimsXten to resolve antitrust concerns.
David Balto, an antitrust attorney and former policy director at the Federal Trade Commission, told Healthcare Dive he doesn't expect the divestiture to resolve the DOJ's issues with the deal, as regulators will likely still have concerns about Change's network and data rights.
"I don't think UnitedHealth's offer to sell Change's claims payment business is going to move the competition thermometer one degree. Really competitive concerns here are their control over Change and Change's data and how they can use that strategically to handicap their rivals, and ultimately how that will dampen competition in the market," Balto said.
The attorney said there have been many cases when courts have rejected proposed divestitures, finding them inadequate to restore competition.
"Just because they're selling it doesn't mean DOJ's going to say this is an acceptable sale," Balto said.
Earlier this month, UnitedHealth and Change extended their merger agreement until Dec. 31. Under the extension, Optum agreed to pay Change $650 million, if a court decides their deal should not go through.
The DOJ trial to block the deal is scheduled to begin Aug. 1.
Despite the legal challenge, UnitedHealth executives told investors earlier this month they were bullish on completing the deal.
UnitedHealth’s extended agreement with Change “reflects our firm belief in the potential benefits of this combination to improve healthcare and in our ability to successfully overcome the challenge to this merger,” Chief Operating Officer Dirk McMahon said on a call April 14.