AHA asks DOJ to probe possible antitrust concerns surrounding Optum-Change Healthcare deal

Mergers and acquisitions deals consolidation
The American Hospital Association is concerned that a deal by Optum to acquire Change Healthcare could reduce competition for health IT services vital to providers. (Getty/Kritchanut)

The American Hospital Association (AHA) is pressing the Department of Justice (DOJ) to probe UnitedHealth Group’s bid to acquire health technology company Change Healthcare due to concerns about competition.

The letter, sent Thursday to DOJ (PDF), said the deal would create a “massive consolidation” of healthcare data. Change offers IT services such as payment accuracy, insurance reimbursement and revenue cycle management.

The hospital lobbying group is worried the $7.84 billion deal, announced in January between Optum and Change, could reduce competition for the sale of health IT services to hospitals and other providers, as Optum is another major provider of health IT services to providers.

“The proposed acquisition also would produce a massive consolidation of competitively sensitive healthcare data and shift such data from Change Healthcare, a neutral third-party, to Optum, a subsidiary of UHG,” the letter said.

The combination of data sets could impact and likely distort decisions on patient care and claims processing and denials “to the detriment of consumers and healthcare providers,” the letter added.

The AHA was also concerned with increasing UnitedHealth Group’s massive market power.

The types of services offered by both Optum and Change are “a must have for healthcare providers to navigate byzantine insurance reimbursement and ensure accurate and timely payment,” the letter said. “The parties are the two largest national providers of these services and scale is a key factor in choosing a healthcare IT provider.”

One of the key selling points for Change is that it bills itself as an independent broker with no link to payers.

“The loss of a key independent competitor that is similar in size to Optum in these essential services will likely result in higher prices for providers and in lower quality clinical outcomes for patients,” the letter added.

Optum and Change said in a statement to Fierce Healthcare on Friday that the goal of the merger will "help healthcare providers and payers better serve patients by more effectively connecting and simplifying key clinical, administrative and payment processes to the benefit of the health system and the people we serve."

This is the latest bid by the AHA to get federal scrutiny into UnitedHealth Group.

The AHA wrote to the Federal Trade Commission last month challenging a new Designated Diagnostic Provider program that eliminates coverage for any diagnostic tests at freestanding and hospital labs unless they are part of the program.

UnitedHealthcare said in response to the AHA’s letter that the policy is meant to address major discrepancies between freestanding and outpatient labs, arguing some of its members pay 500% more on average for lab services depending on where they are performed.