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DOJ tries to thwart healthcare merger

There are all sorts of hurdles to overcome when working through healthcare mergers. In a recent example, the Department of Justice (DOJ) filed a lawsuit to stop a merger between UnitedHealth Group and Change Healthcare. Talk about a hurdle.

More on the players

UnitedHealth is an integrated healthcare enterprise composed of the largest health insurer in the United States as well as a network of health care providers and a large pharmacy benefit manager. Change is a health care technology company that provides health care analytics and software services as well as data to healthcare providers and insurers.

More on the deal

United was looking to acquire Change in an effort to increase the efficiency of healthcare operations. Change essentially controls a data highway that has access to almost half of all American’s health insurance claims every single year.

More on the dispute

Those close to the matter state the acquisition would ultimately produce lower costs as it would consolidate healthcare data.

The DOJ disagreed. After getting multiple complaints from organizations like the American Hospital Association, they chose to step in. The suit slows the $13 billion transaction, arguing if successful it would harm competition in commercial health insurance markets.

UnitedHealth has agreed to sell of Change Healthcare’s claims editing business, likely in a move to appease regulators and help move the deal forward.

More on the lessons for others trying to make similar deals

Those who are looking to move forward with a merger or acquisition deal are wise to take similar concerns into consideration. If the government is concerned the deal will harm competition within healthcare, like the potential threat to commercial healthcare insurance noted in the case above, it will step in. Those who are considering these transactions can mitigate this risk by seeking legal counsel to review the proposal and discuss any potential risks.

Attorney John Rivas is responsible for this communication