Dive Brief:

• The U.S. Department of Justice, in a lawsuit filed Thursday, made good on its threat to attempt a halt on UnitedHealthcare's plan to absorb healthcare data analytics company Change Healthcare.
• Provider lobbies including the American Hospital Association have charged that the $13 billion deal announced in January 2021 would give UnitedHealthcare, the country's largest private payer, unfair advantage through access to Change's health data and would lead to more claims denials and restricted coverage.
• The lawsuit alleges that if UnitedHealth acquired Change, the payer would be able to gain that advantage by seeing "very competitively sensitive" data from other insurers showing plan designs and provider payment calculations.

Dive Insight:

The move by the DOJ to block the deal, announced a few days before the department's deadline of Sunday to file a lawsuit, comes as the Biden administration cracks down on anticompetitive practices in healthcare and other sectors. The DOJ began investigating the acquisition two months after it was announced by UnitedHealth arm Optum.

Last week, the companies gave the DOJ a 10-day notice that they planned to complete the deal.

DOJ is now requesting the court bar the companies from completing the proposed acquisition or any other arrangement that would involve United buying or merging with Change.

"Unless the deal is blocked, United stands to see and potentially use its health insurance rivals' competitively sensitive information for its own business purposes and control these competitors' access to innovations in vital health care technology," Principal Deputy Assistant Attorney General Doha Mekki said in a DOJ statement.

In a statement to Healthcare Dive on Thursday, Optum said the companies would defend the case vigorously.

"Change Healthcare and Optum together can increase efficiency and reduce friction in health care, producing a better experience and lower costs," it said. "The Department's deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system."

The lawsuit alleges that United, by acquiring Change, would gain access to Change's electronic data interchange clearinghouse, which is used by nearly all of United's competitors to exchange claims between payers and providers. United also would get Change's first-pass claims editing technology and thereby become a monopoly in the market.

The first-pass claims editing tools are used as an initial check on claims for accuracy and coverage. United's own technology is second in the market, and if the acquisition goes through, it would control three-quarters of the market.

The DOJ charges that United is well aware of this potential advantage and it is a major reason behind the proposed acquisition.

"Although it carefully safeguards its own claims data, United covets its rivals' claims data and has long sought to acquire Change for this reason," the lawsuit said.

Change said in statement on Thursday that it's disappointed by the lawsuit.

"We will continue our support of UHG in working toward closing the merger as we comply with our obligations under the merger agreement," the company said.