The complaint, filed Thursday in the U.S. District Court for the District of Columbia, alleges the $13 billion proposed transaction is anticompetitive.
The Department of Justice (DOJ), along with the Attorneys General of Minnesota and New York, filed a civil lawsuit against Eden Prairie, Minnesota-based UnitedHealth Group to block its acquisition of Nashville-based Change Healthcare.
The complaint, filed Thursday in the U.S. District Court for the District of Columbia, alleges the $13 billion proposed transaction is anticompetitive, and would raise costs and harm competition in not only health insurance markets, but also technology used by health insurers to process insurance claims and reduce healthcare costs.
"Quality health insurance should be accessible to all Americans,” Attorney General Merrick B. Garland said in a statement. "If America’s largest health insurer is permitted to acquire a major rival for critical health care claims technologies, it will undermine competition for health insurance and stifle innovation in the employer health insurance markets. The Justice Department is committed to challenging anticompetitive mergers, particularly those at the intersection of health care and data."
New York Attorney General Letitia James cited concerns of increased cost and decreased quality healthcare for New Yorkers.
"It’s concerning that amidst a devastating pandemic United is pursuing actions that would drive up healthcare costs and reduce the quality of services for New Yorkers and patients nationwide," James said in a press release. "New Yorkers need affordable healthcare, not health insurance companies primarily concerned with market dominance. We are suing United to stop its attempted acquisition of Change to ensure that New Yorkers benefit from competitive healthcare markets. I will continue to fight to ensure New Yorkers have access to affordable, quality healthcare."
Minnesota Attorney General Keith Ellison cited concerns over it being too much market power for once company, which would increase costs for Minnesotans.
"My job is to help Minnesotans afford their lives — and it’s already tough enough to do that these days, especially with the rising cost of health care. This proposed merger would increase costs and decrease the quality of healthcare for Minnesotans and all Americans. It would put too much market power and data in the hands of one corporation at so many levels of the health care industry, and that would raise costs and decrease choice for consumers in an already deeply flawed system Ellison said in a press release. "Minnesotans and consumers everywhere should have full access to healthcare they can afford — not have health insurance companies attempting to undermine that through monopolistic market dominance. I am joining the Department of Justice and the State of New York in suing United and Change to prevent this merger, to fight against further vertical market integration, and to fight for better service and lower costs to consumers."
UnitedHealth Group sent a statement to HealthLeaders on Thursday regarding their disappointment in the lawsuit.
"Change Healthcare and Optum together can increase efficiency and reduce friction in health care, producing a better experience and lower costs. The Department’s deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system. We will defend our case vigorously."
The transaction, which was first announced in January 2021, was created to "more effectively connect and simplify core clinical, administrative and payment processes - resulting in better health outcomes and experiences for everyone, at lower cost," according to a joint statement from that time from UnitedHealth and Change Healthcare.
The transaction faced opposition from the American Hospital Association from the beginning, who asked the DOJ in March 2021 to launch an anti-trust investigation.
By August 2021, the DOJ considered a possible lawsuit to block the acquisition, which was expected to close in the second half of 2021.
Related: Suit Warns of 'Anti-competitive Effects' in Proposed United, Change Healthcare Merger
Melanie Blackman is a contributing editor for strategy, marketing, and human resources at HealthLeaders, an HCPro brand.