If DOJ Blocks UnitedHealth/Change Deal, Dispute Could Linger

by Peter Johnson

The Department of Justice (DOJ) is considering taking steps to block UnitedHealth Group's planned acquisition of Change Healthcare Inc., according to press reports.

In March, Change Healthcare and UnitedHealth received a request for additional information about their proposed tie-up from the DOJ, signaling that the department would be closely scrutinizing the deal.

Provider community objects to transaction:

• The American Hospital Association (AHA) sent a letter a few days before the announcement "respectfully request[ing] that [DOJ] conduct a thorough investigation of the proposed transaction because it threatens to reduce competition for the sale of health care information technology services to hospitals and other health care providers."
• The deal is "generally of concern to the provider community, as you can see in the American Hospital Association opposition, that there would be such a large data analytics company affiliated with what happens to be the largest health insurance carrier. I think just the sheer market share alone is what's causing people concern," Raja Sekaran, an attorney and partner of Nossaman LLP.

Biden admin could focus on consumer and employee harms:

• From a legal perspective, the rumors are a sign that the Biden administration is serious about its tough antitrust talk, says David Kaufman, a partner at Laurus Law Group LLC. Citing a July 9 executive order, he observes that Biden "is really trying to reinvigorate that concept of considering the benefits of competition, and the damage caused by failure in competition — what that does for consumers and…employees."

Suit could drag on for years:

• No matter which way such a suit would go, Sekaran expects that it would take a long time to be settled or decided.
• "lt's hard to predict an endpoint — it could go on for a long time," Sekaran says. "To initiate litigation right now, with COVID, not being fully resolved — it's really, truly speculative when this thing might conclude. That might put enough pressure on the deal — I don't have any inside knowledge of that — but that might put enough pressure on the deal to impair it."

From Health Plan Weekly