Federal judge approves acquisition of Change Healthcare by UnitedHealth Group

Federal judge approves acquisition of Change Healthcare by UnitedHealth Group

In a high-profile antitrust case, a federal judge on Monday (September 19th) approved the proposed acquisition of Change Healthcare Inc, by UnitedHealth Group Inc., which had been halted by the intervention of the Department of Justice.

As BloombergLeah Nylen of Leah wrote Monday afternoon: “UnitedHealth Group Inc. has won court approval for its $7.8 billion acquisition of Change Healthcare Inc., beating a Justice Department lawsuit that sought to block the deal. A Washington federal judge’s decision on Monday is a victory for UnitedHealth Group, which has sought to diversify its business beyond insurance. The company plans to merge Change — which operates a network used by doctors, hospitals, dentists and pharmacies to exchange health insurance claims — with its Optum Insight data and consulting business. In a one-page order, U.S. District Judge Carl Nichols ruled in favor of the merger and ordered the companies to divest ClaimsXten to TPG Capital, as proposed. Shares of Change rose more than 7% in early trading on Tuesday. UnitedHealth shares were little changed.

A UnitedHealth spokesperson said the company looks forward to “combining with Change Healthcare as quickly as possible,” in an email to Bloomberg.

As a Reuters staff report noted on Monday, “The Justice Department filed a lawsuit in February seeking to stop the $8 billion acquisition, saying the deal would give America’s largest health insurer access data from its competitors and ultimately increase health care costs. . The department’s top antitrust official, Jonathan Kanter, said they were “carefully reviewing the notice to assess next steps.” UnitedHealth announced the all-cash deal in January 2021, saying it would help streamline administrative and payment processes. Judge Carl Nichols said in a brief order on Monday that he would deny the government’s request to halt the deal and ordered the companies to proceed with the sale of assets they had proposed. The order follows a trial in the case in August in U.S. District Court for the District of Columbia. UnitedHealth said it was “pleased with the decision” and looked forward to combining with Change as soon as possible. The Justice Department said UnitedHealth and Change Healthcare offer competing software for processing healthcare claims and together serve 38 of the nation’s top 40 health insurers. The department argued that access to claims would give UnitedHealth insight into the health plans of rivals, including Humana Inc (HUM.N), Anthem Inc and others.

The Reuters report continues: “The loss to the Department of Justice follows a recent ruling by a Federal Trade Commission judge that genetic testing equipment maker Illumina should be allowed to buy the manufacturer of Grail cancer detection tests – a decision the agency opposes.” And, he added, “the department’s top antitrust official, Jonathan Kanter, said they are ‘reviewing the opinion carefully to assess next steps.'”

Monday evening, the the wall street journal‘s Anna Wilde Mathews and Brent Kendall reported that “U.S. District Judge Carl Nichols ruled for the companies in an opinion he kept sealed for now because he said it “may contain competitively sensitive information.” The judge said he would release a public redacted version of the ruling in the coming days. In a one-page public order, he denied the Justice Department’s request The court’s ruling represents a first blow to stepped up antitrust enforcement by the Biden administration, which filed a lawsuit in February to block the deal. Justice Department senior antitrust official Jonathan Kanter said the department disagrees with the decision and is considering its next steps,” they wrote, quoting Kanter as stating that “protection competition and t access to affordable health care is of the utmost importance to the Antitrust Division. and the Department of Justice.

Additionally, Mathews and Kendall wrote, “The decision is a triumph for UnitedHealth, which owns America’s largest health insurer and a health care operation that includes thousands of physicians as well as clinics, surgery centers and d other assets, as well as a powerful healthcare conglomerate. Data.” They added that “UnitedHealth had agreed to divest business assets related to claims processing to address competition concerns, an offer that the Justice Department had rejected as insufficient. Judge Nichols, in his order, asked UnitedHealth to make this assignment.

And, Mathews and Kendall noted, “UnitedHealth’s agreement for the switch, announced in January 2021, will bring the health technology company under the company’s Optum health services arm. UnitedHealth had argued that its combination with Change could help improve care by providing better information to doctors and reducing waste. He agreed to pay nearly $8 billion for Change and take on about $5 billion in debt. The Justice Department had argued that the deal would give UnitedHealth a virtual monopoly on an important tool that health insurers use to determine when a claim should be paid. And he said the company should not be allowed to own Change Healthcare’s data clearinghouse, which rival insurers use to compete with UnitedHealth. The judge, appointed by former President Donald Trump, expressed his skepticism of the lawsuit during a hearing earlier this month. A trial took place in August.

Like Mark Reilly of Minneapolis/St. Paul’s business diary wrote on July 29, “UnitedHealth first announced the deal for Nashville-based Change Healthcare in early 2021, seeking to integrate Change into its Optum healthcare services division. Valued at around $13 billion at the time of the announcement, it was by far the largest M&A deal announced by a Minnesota company last year. However, federal regulators — along with attorneys general in Minnesota and New York — have filed a lawsuit to block the acquisition, saying the deal would harm competition because it would give UnitedHealth too much information about its businesses. rivals in insurance and health technology.

#Federal #judge #approves #acquisition #Change #Healthcare #UnitedHealth #Group

Leave a Comment

Your email address will not be published.