In a blow to DOJ, judge allows UnitedHealth-Change Healthcare merger to move forward

Editor's note: This story has been updated to include a statement from the Department of Justice.

A federal judge will allow UnitedHealth Group's acquisition of Change Healthcare to proceed, dealing a blow to the Biden administration's healthcare antitrust efforts.

District of Columbia Judge Carl Nichols issued a sealed opinion late Monday blocking the Department of Justice's attempt to intervene in the case, and ordering Change Healthcare to sell off its ClaimsXten business arm as planned.

In the suit, DOJ argued that should the deal be allowed to move forward, it would grant UnitedHealth access to a treasure trove of data on other payers that it could potentially misuse to benefit UnitedHealthcare, its insurance arm.

UnitedHealth plans to fold Change Healthcare into Optum, which also operates a data analytics segment called Optum Insight. As such, UHG countered that it already has access to competitors' data, and using that inappropriately would likely deal a huge financial blow to Optum, its fastest-growing segment.

The health insurance giant said in a statement to Fierce Healthcare that it is "pleased" with the outcome.

“We are pleased with the decision and look forward to combining with Change Healthcare as quickly as possible so that together we can continue our work to make the health system work better for everyone," UnitedHealth Group said.

DOJ officials, meanwhile, were less enthused with the result.

“We respectfully disagree with the court’s decision and are reviewing the opinion closely to evaluate next steps," Assistant Attorney General Jonathan Kanter said in a statement. "Protecting competition and access to affordable healthcare is of the utmost importance to the Antitrust Division and the Department of Justice. We are grateful to the Antitrust Division staff – the attorneys, economists, paralegals, and administrative professionals – who work tirelessly to uphold the value of competition.”

The ruling comes after a weeks-long trial that included testimony from big names such as CEO Andrew Witty and his predecessor, David Wichmann. Media reports earlier this month suggested that Nichols seemed skeptical of DOJ's argument in the case.

The courts' decision is also the culmination of lengthy back-and-forth over the deal, which was first announced nearly two years ago in January 2021. Since then, UnitedHealth and Change have extended their merger plans multiple times as the feds probed the deal, with DOJ ultimately suing to intervene in February. That the agency would seek to block the deal was rumored several times before the suit was filed earlier this year.

The legal proceedings were also a major headliner for the Biden administration's renewed focus on antitrust enforcement. Experts said as the trial began that there are clear signs that DOJ plans to "expand the frontiers of merger enforcement."

Meanwhile, UnitedHealth and Change have already found a buyer for the ClaimsXten business, TPG Capital, in a deal valued at $2 billion. The companies began shopping for a buyer for the payment integrity arm in a bid to secure federal backing to consummate the merger, though the sale to TPG is contingent on the merger going through. Nichols ordered the two companies to complete the sale as planned as part of his ruling Monday.