On the heels of
last week’s positive court action on the No Surprises Act which corrects the unbalanced playing field that had favored insurers on surprise billing arbitration, the U.S. Attorney General has filed a lawsuit to block a transaction that it says will tilt the playing field in favor of a single insurer—UnitedHealth Group.
Along with the Attorneys General in Minnesota and New York, the U.S. Department of Justice (DOJ) filed a federal lawsuit to stop UnitedHealth Group (UHG) from acquiring Change Healthcare. According to the DOJ press release, “Change markets itself as a valuable partner for insurers, working with them to innovate and problem-solve. United’s acquisition of this neutral player would allow United to tilt the playing field in its favor, harming current competition and allowing United to control and distort the course of innovation in this industry for the foreseeable future.”
UnitedHealth Group owns the largest health insurer in the United States as well as Optum Health, Optum Rx and OptumInsight. UHG’s revenues were $288 billion in 2021, with a reported $17.3 billion in profit. Change Healthcare is an independent health care technology company that provides software and services, including claims processing software, to providers, health insurers and other health care firms. Change’s revenues were $3.4 billion in 2021.
According to the complaint, the proposed $13 billion transaction would give UHG access to its rival health insurers’ competitively sensitive information, which it could use to gain an unfair advantage and harm competition. Indeed, the complaint indicates that the acquisition would not just harm, but effectively eliminate competition for “first-pass” claims editing technology, giving UHG a monopoly share in the market. This product helps health insurance companies efficiently process claims, saving billions of dollars each year.
“If America’s largest health insurer is permitted to acquire a major rival for critical health care claims technologies, it will undermine competition for health insurance and stifle innovation in the employer health insurance markets,” said Attorney General Merrick Garland.
Although not addressed directly in the complaint, health care providers have been concerned about a particular aspect of the transaction—namely, that Change owns a clinical decision-making tool called InterQual. InterQual is seen as an independent algorithm that can be used to help providers and clinical staff determine the right level of care for patients. Under the acquisition, there is a concern that the tool would no longer be independent, and the insurer would have an incentive to manipulate the algorithm, fundamentally interfering in the doctor-patient relationship.
“We already see numerous instances where insurers overstep with burdensome utilization management tools because they benefit financially when patients use less care,” said WHA Senior Vice President of Public Policy Joanne Alig. “If United were to now own InterQual, it would be a bit like the fox guarding the henhouse.”
In a
statement, American Hospital Association General Counsel Melinda Hatton praised the DOJ and echoed concerns about the impacts of the acquisition. “Had DOJ allowed this transaction to move forward it would have permitted a massive concentration of sensitive health care data in the hands of a single, powerful owner with an inherent conflict of interest. There is every indication that it is Change Healthcare that constrains UHG’s largest subsidiary’s (Optum) ability to prejudice payment accuracy in favor of its own financial outcomes by means of increased patient payment denials and coverage restrictions. And, allowing Optum the opportunity to own and then manipulate Change’s proprietary evidence-based clinical support criteria (InterQual) also would have allowed UHG to build its corporate profits by increasing patient claim denials.”