Federal trial begins over proposed UnitedHealth, Change Healthcare merger: 8 notes

The trial over a Justice Department challenge to the $13 billion proposed merger of UnitedHealth Group's Optum and Change Healthcare began Aug. 1 in Washington, D.C.

Though originally expected to close in the second half of 2021, the deal has been heavily scrutinized by medical groups and federal agencies and has broader implications for the Biden administration's ability to expand and enforce federal antitrust regulations.

Eight things to know:

  1. The $13 billion acquisition was first proposed in January 2021 and would merge Nashville, Tenn.-based Change Healthcare with OptumInsight to offer software, data analytics and other services to healthcare clients.

  2. In March 2021, the American Hospital Association denounced the proposed merger, citing potential for harm to providers and reduced competition for healthcare IT services. The move triggered an investigation by the Justice Department, which came to an agreement with the two companies in August 2021.

  3. In February 2022, the National Community Pharmacists Association asked the Federal Trade Commission to investigate the proposed merger in the context of anticompetitive behavior.

  4. The same month, the Justice Department filed a lawsuit to challenge the merger, saying it would harm competition in commercial markets, raise costs on millions of people and give UnitedHealth too much power in electronic data transactions. On March 17, UnitedHealth claimed the lawsuit has "no basis in fact and law." A 12-day trial was set for Aug. 1.

  5. On April 5, Optum and Change Healthcare extended their merger agreement through the end of 2022 and set a $650 million reversal fee if the deal fails.

  6. If the deal is approved, UnitedHealth said April 26 it would sell Change's claims editing business, ClaimsXten, to TPG Capital for $2.2 billion to resolve concerns of anticompetitive behavior.

  7. UnitedHealth Group CEO Andrew Witty and former CEO David Wichmann are set to testify at the trial, the Minneapolis Business Journal reported July 29.

  8. According to the Journal, the case has federal implications because the Biden administration views it as a bellwether for how antitrust regulations can be utilized, especially for future healthcare mergers.


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