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Justice Dept. Sues to Block $13 Billion Deal by UnitedHealth Group

WASHINGTON – The Justice Department on Thursday filed a lawsuit seeking to block a health technology company’s $ 13 billion acquisition by a subsidiary of United Health Group, in the latest move to curb corporate consolidation by the Biden administration.

The agency argued that the deal to buy health tech firm Change Healthcare by UnitedHealth would provide UnitedHealth with sensitive data that could compete with its competitors in the insurance business. The lawsuit was filed in U.S. District Court for the District of Columbia. New York and Minnesota also joined the lawsuit.

A spokesman for Optam, a United Health subsidiary, said in a statement that the Justice Department’s “deeply flawed position is based on highly speculative principles that do not reflect the realities of the health care system,” adding that the company would “defend our case” vigorously. A spokesman for Change Healthcare said it was still “working towards closing the merger because we are fulfilling our obligations under the merger agreement.”

The deal is the latest in a long line of protests against the Biden administration, which has made corporate consolidation a central part of its economic agenda. President Biden last year signed an executive order to boost competition in various industries. He appointed Leena Khan, a leading critic of the tech giants, to head the Federal Trade Commission, and Jonathan Canter, a lawyer representing large corporations, as head of the no-confidence motion in the Justice Department.

Since then, the FTC has blocked Lockheed Martin from buying missile propulsion systems company and chip giant Nvidia from buying the design firm Arm. Earlier also Mr. Cantor was confirmed, with the Justice Department claiming to have blocked the merger of two major insurance brokers; Purchase of Simon and Schuster by publisher Penguin Random House; And some of JetBlue’s operations may have married American Airlines.

“It’s part and parcel of this effort to make sure markets are really competitive,” said William Barre, who previously served as head of the Justice Department’s no-confidence motion.

In a statement, Attorney General Merrick B. Garland said the agency is “committed to challenging competitive mergers, especially at the intersection of healthcare and data.”

Optme said last year that it would buy Change Healthcare, which provides technology services to insurance companies. UnitedHealth is one of the largest health corporations in the country with revenue of $ 287.6 billion in 2021. In addition to its healthcare information technology business, its Optum unit owns a large chain of physician practice, surgery centers and the largest pharmacy in the country. Benefit managers.

Change Healthcare at the Justice Department’s litigation center collects when it helps process insurance claims. The department argued that the deal would enable UnitedHealth to look at the rules that its competitors use to process claims and reduce them. UnitedHealth could also crush data on patients from other insurers in order to gain a competitive advantage, the agency said.

The lawsuit alleges that, according to UnitedHealth estimates, more than half of American medical insurance claims “pass (or touch)” changes the healthcare system. Were seen.

The lawsuit also argues that United Health Change could block healthcare products – used by other insurers – to protect itself from competitors or some of its new innovations. The Justice Department added that the deal would give UnitedHealth a monopoly on a type of service that was used to screen insurance claims for errors and speed up the process.

The companies said the acquisition would improve efficiency in the industry. They also sought to sell a portion of Change Healthcare that would give the Justice Department a new monopoly on United Health.

Lawmakers and regulators are increasingly concerned that large businesses could use the data to hurt their competitors. A congressional committee has examined whether Amazon uses data from outside merchants who use its platform to develop competitive products, for example. Critics of Facebook have also argued that having years of user data makes it difficult for upstart services to challenge its dominance.

Since then Mr. Cantor, who joined the Justice Department’s no-confidence motion, has said he should not oversee cases against companies representing rivals while he is in private practice. According to the financial disclosure form he filed last year, he once represented Signna, a major insurance company competing with United Health and remote health care company Teladok.

Mr. Canter did not take part in the lawsuit against UnitedHealth, said a source familiar with the Justice Department’s case.

Reed Abelson Contribution Report.

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