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DOJ investigating UnitedHealth Group's $13 billion Change Healthcare acquisition

Federal officials want a second look at UnitedHealth Group's $13 billion plan to acquire data analytics and revenue cycle management company Change Healthcare.

The Department of Justice requested more information from both companies about the transaction, according to an SEC filing submitted by Change Healthcare on Friday. The so-called second request will give regulators more time to review the buyout beyond the standard 30-day period.

UnitedHealth Group announced in January that its fastest-growing subsidiary, Optum, would pay approximately $8 billion to acquire Change Healthcare. Optum also said it would pay off $5 billion in debt owed by the Nashville, Tenn.-based company. At the time, analysts predicted the acquisition would allow Optum to expand its OptumInsight provider business, inform its value-based care initiatives and increase patient engagement.

But the American Hospital Association called for antitrust regulators to investigate the merger, saying the buyout could reduce competition in health IT services and result in higher prices for providers and lower quality for patients. In a letter sent to the DOJ on March 18, AHA said that UnitedHealth Group and Change Healthcare sold off hundreds of millions of dollars worth of assets to ward off scrutiny from antitrust regulators. An SEC filing from early March said the companies may sell assets if required for antitrust approval, although divestitures worth more than $650 million in annual revenue from UnitedHealth Group would represent a "burdensome condition" for the Minnetonka, Minn.-based healthcare giant.

UnitedHealth Group, which owns the largest insurance company in the nation and is reportedly also the nation's largest employer of physicians, could consolidate much of the country's healthcare data and use it to process and deny claims if the acquisition is approved, AHA said. Hospitals are particularly concerned about a loss of competition in claims clearinghouse, payment accuracy, revenue cycle management and clinical decision support services.

"Post-merger, Optum will have strong financial incentives to use competitive payers' data to inform its reimbursement rates and set its competitive clinical strategy, which will reduce competition among payers and harm hospitals and other providers," the AHA wrote. The Biden administration has recently said that it plans to take a more critical eye toward corporate mergers, including in the healthcare industry.

UnitedHealth Group did not immediately respond to an interview request over the matter. The SEC filing notes the healthcare giant and Change Healthcare "have been working cooperatively with the DOJ and will continue to do so."


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