Justice Department Plans to Block UnitedHealth Group’s $13 Billion Deal


WASHINGTON — The Department of Justice plans to file a lawsuit on Thursday by a subsidiary of UnitedHealth Group to block the $13 billion acquisition of a health tech company, two people familiar with the matter said, in the Biden administration’s latest move to put pressure on corporate consolidation.

The agency plans to argue that UnitedHealth’s deal to buy health tech company Change Healthcare will give UnitedHealth sensitive data it can use against its insurance industry rivals, two people who are not authorized to discuss the matter publicly. The case is expected to be filed in the U.S. District Court for the District of Columbia.

A Justice Department spokesperson declined to comment. The companies did not immediately respond to requests for comment.

The deal will be the latest to face opposition from the Biden administration, which has made tackling corporate consolidation a central part of its economic agenda. President Biden signed an executive order last year to promote competition in different industries. He was also appointed lina hanleading the Federal Trade Commission, one of the leading critics of tech giants, and Jonathan KanterAn attorney representing large corporations as chief of antitrust efforts in the Department of Justice.

Since then, the FTC blocked Lockheed Martin from purchasing a missile propulsion system manufacturer and from buying chip giant Nvidia design firm Arm. Even before Mr. Kanter was approved, the Justice Department sued to block the merger of the two major insurance brokers; most Acquisition of Simon & Schuster by publisher Penguin Random House; and an agreement to merge some of JetBlue’s operations with American Airlines.

The lawsuit, scheduled for Thursday, will challenge a deal that Optum, a subsidiary of UnitedHealth, said last year will buy Change Healthcare, which provides technology services to insurers. UnitedHealth is one of the country’s largest healthcare companies, with revenue of $287.6 billion in 2021. In addition to its healthcare information technology business, the Optum unit owns doctors’ offices, a large chain of surgical centers and one of the largest pharmacies in the country. benefits managers.

At the heart of DOJ’s planned lawsuit is data that Change Healthcare collects while helping to process insurance claims. The Justice Department plans to argue that the deal will allow UnitedHealth to see the rules its competitors use to process claims and beat them. The lawsuit is expected to say that UnitedHealth may also compress data on patients from other insurance companies to gain a competitive advantage, according to two people familiar with the matter.

The lawsuit is also expected to say that UnitedHealth may withhold Change Healthcare’s products used by other insurers from competitors or keep some of its innovations to itself. The Justice Department plans to add that the deal will give UnitedHealth a monopoly on a type of service used to scan insurance claims for errors and speed processing, the two people said.

The companies said the acquisition would increase productivity in the industry. They also investigated the sale of the Change Healthcare division, which the Justice Department said would give UnitedHealth a new monopoly.

Lawmakers and regulators are increasingly concerned that large businesses can use copious amounts of data to harm their competitors. A congressional committee investigated whether Amazon, for example, uses data from outside merchants who use its platform to develop competing products. Facebook critics also argued that the company, which has years of user data, makes it difficult for a startup service to challenge its dominance.

Since Mr. Kanter joined the antitrust division at the Justice Department, critics have said he should not oversee lawsuits against companies he represented competitors while in private practice. He represented Cigna, a major insurance company that once competed with UnitedHealth, and Teladoc, a remote healthcare company, according to a financial disclosure form he submitted last year.

One of the people with knowledge of the Justice Department’s case said that Mr. Kanter did not participate in the case against UnitedHealth.

Reed Abelson contributing reporting.



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