Minn. A.G. Ellison Sues to Block UnitedHealth Group Proposed Acquisition of Change Healthcare – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Newswires
Topics
    • Life Insurance News
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Articles
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
Sign in or register to be an INNsider.
  • Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
  • Insider Pro
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Newswires
Newswires RSS Get our newsletter
Order Prints
February 25, 2022 Newswires No comments
Share
Share
Tweet
Email

Minn. A.G. Ellison Sues to Block UnitedHealth Group Proposed Acquisition of Change Healthcare

Targeted News Service

ST. PAUL, Minnesota, Feb. 25 -- Minnesota Attorney General Keith Ellison issued the following news on Feb. 24, 2022:

Minnesota Attorney General Keith Ellison today filed an antitrust lawsuit with the U.S. Department of Justice and the State of New York to stop UnitedHealth Group's proposed acquisition of Change Healthcare.

United, the largest healthcare company in the United States and the fifth-largest company in the Fortune 500 by revenue, already has a significant presence in nearly every level of the healthcare and insurance industry. United is the owner of a large network of healthcare providers, a massive pharmacy benefit manager, and a healthcare technology business called OptumInsight. OptumInsight acts as the exclusive electronic data clearinghouse through which United accepts healthcare insurance claims and also provides a "first-pass" health insurance claims-editing product that has a national market share of over 25 percent.

Related stories

  • BeWellnm announces successful open enrollment period
  • Bill looks to pay teachers' health care premiums

Change Healthcare is a leading healthcare technology company that is currently not affiliated with any healthcare provider or insurer. Change operates the nation's largest electronic data clearinghouse for health insurance claims, through which more than 50 percent of all U.S. healthcare claims pass -- including the sensitive and proprietary claims data for nearly every major competitor of United. According to one of United's consultants, this means Change has data and insight into over 70 percent of all payers, providers, pharmacies, and physician organizations throughout the country. Change is also the premier "first-pass" healthcare insurance claims-editing company in America, with a market share of over 50 percent. Change's "first pass" claims-editing product, called ClaimsXten, is used by nine of the top ten health insurers in America -- all but United.

Among other anticompetitive effects, United's acquisition of Change would create a "first pass" claims-editing behemoth with a market share of at least 75 percent -- an acquisition that is presumptively anticompetitive and, as the complaint alleges, would be a merger to monopoly. The proposed merger's monopolistic vertical market integration would hurt United's competitors, Change's current competitors, employers, providers, and ultimately consumers, who could see lower-quality service and higher costs from significantly reduced competition.

"My job is to help Minnesotans afford their lives -- and it's already tough enough to do that these days, especially with the rising cost of health care. This proposed merger would increase costs and decrease the quality of healthcare for Minnesotans and all Americans. It would put too much market power and data in the hands of one corporation at so many levels of the health care industry, and that would raise costs and decrease choice for consumers in an already deeply flawed system," Attorney General Ellison said. "Minnesotans and consumers everywhere should have full access to healthcare they can afford -- not have health insurance companies attempting to undermine that through monopolistic market dominance. I am joining the Department of Justice and the State of New York in suing United and Change to prevent this merger, to fight against further vertical market integration, and to fight for better service and lower costs to consumers."

Harms of the proposed acquisition

United's proposed acquisition of Change would cause significant harm to United's competitors in the healthcare insurance market, with harmful effects on providers, employers, and consumers as well.

The complaint alleges that the acquisition would allow United to use Change's enormous repository of claims data to give it an unparalleled competitive advantage to raise costs for its competitors, deny them the ability to compete fairly with United, and deny them access to innovations or information that could lead to innovations. United's proposed acquisition of Change would allow United to use the competitively sensitive data that Change holds to co-opt rival insurers' innovations and preempt their competitive strategies, reducing their incentives to pursue those innovations and strategies in the first place. It would also allow United to use its control over Change's technologies to disadvantage other health insurers by raising their costs, degrading the quality of their services, and denying or delaying their access to innovations and quality improvements.

According to the complaint (

84, pp. 28-29):

The Proposed Transaction would likely substantially lessen competition and harm consumers in the aforementioned relevant markets in three ways.

* First, by giving United broad access to its health insurer rivals' competitively sensitive information through Change's first-pass claims editing solution and EDI clearinghouse, the Proposed Transaction is likely to substantially lessen competition in the markets for the sale of commercial health insurance to national accounts and large group employers.

* Second, United's acquisition of Change's first-pass claims editing solution and EDI clearinghouse would enable United to raise the costs of its health insurance rivals, reducing their ability to compete with UnitedHealthcare. This would likely substantially lessen competition in the markets for the sale of commercial health insurance to national accounts and large group employers. Post-transaction, United could raise its health insurance rivals' costs through means such as denying or delaying their access to innovations that would provide greater efficiency in claims processing.

* Third, United and Change are the two most significant competitors in the first-pass claims editing solutions market, with a combined market share of at least 75 percent. The Proposed Transaction would eliminate head-to-head competition between United and Change and tend to create a monopoly in that market. The Proposed Transaction is presumptively unlawful under longstanding Supreme Court precedent...

Ultimately, the proposed merger would harm not only United's competitors: it would harm employers, healthcare providers, and consumers as well.

* Minnesota employers would face a difficult and unwelcome choice when choosing an insurer. Employers that choose a United rival would get lower-quality clearinghouse and "first pass" claims-editing services. Employers that choose United would likely pay higher prices than would have been available in a competitive market, while United would be disincentivized to provide a competitive edge in quality because of its monopolistic market share.

* Ultimately, these higher costs and lower levels of service would be passed onto Minnesota providers and consumers.

About UnitedHealth Group and Change Healthcare

UnitedHealth Group, headquartered in Minnetonka, includes United Healthcare ("UHC," the health insurance subsidiary), and Optum (the "information and technology-enabled services" subsidiary). UHC is the largest commercial health insurer in Minnesota. Optum is divided into three business lines: OptumRx, OptumHealth, and OptumInsight. OptumInsight provides healthcare data, analytics, research, consulting, technology, and managed-services solutions. OptumHealth is one of the largest owners of provider groups in the country, with 53,000 physicians nationally.

Change Healthcare is a leading independent healthcare technology company. Change provides data and analytics-driven insights to both providers and insurers. It also runs the nation's largest EDI clearinghouse. Clearinghouses are a vital part of the infrastructure underpinning every interaction between a doctor and patient: they facilitate the transmission of claims to insurers and claim approvals or rejections back to providers. Change Healthcare has built up a large database of claims data for over 200 million patients from these transactions, dating back to 2012. Change also owns ClaimsXten, the nation's leading claims-editing software. Claims editing is another vital part of the healthcare infrastructure, driving savings to the system by ensuring accuracy and avoiding overpayments.

Help for consumers

Attorney General Ellison urges Minnesota consumers to report their antitrust concerns in the healthcare industry or any other Minnesota industry by submitting a complaint online or by calling the Attorney General's Office at (651) 296-3353 (metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay).

Older

N.Y. A.G. James Sues to Block UnitedHealth Group's Proposed Acquisition of Change Healthcare

Newer

Socotra Chosen as Core Platform to Power Aioi Nissay Dowa’s MOTER Commercial Fleet Insurance Program

Advisor News

  • Jury finds Lexington investment advisor, guilty of charges related to fraud
  • Chicago investment advisor indicted for allegedly swindling clients out of $683,000
  • Will the family maximum limit my Social Security benefits?
  • South Florida resort sold for $835M, biggest deal for a U.S. hotel since pandemic started
  • Passage of the Secure Act 2.0 brings retirement crisis into focus
More Advisor News

Annuity News

  • $747 million Powerball jackpot still up for grabs
  • Study: Does pessimism really suppress annuity sales?
  • Sweet streams of income: ChatGPT, the bard of annuities
  • F&G Annuities & Life announces equity investment in life IMO SYNCIS
  • Investors scrambling to lock in rates propel annuity sales to record highs
Sponsor
More Annuity News

Health/Employee Benefits News

  • Florida looks to double amount of medical-marijuana licenses
  • Bipartisan group of Missouri lawmakers look to extend healthcare coverage for new moms
  • Medicaid extension for new moms advances amid abortion discussion
  • Medicaid's pandemic benefits are ending
  • Congress has capped Medicare insulin costs. Here’s how it works and what it means
More Health/Employee Benefits News

Life Insurance News

  • In Murdaugh murder trial, the path to conviction remains unclear
  • Libby Murdaugh's caretaker saw Alex night of murders for '20 minutes', but he said '30 to 40'
  • SC judge in Murdaugh murder trial allows jury to hear alleged financial crime motive
  • How the cases in Alex Murdaugh's murder trial are shaping up
  • Testimony: Maggie Murdaugh may have bought gun that killed her
More Life Insurance News

- Presented By -

Top Read Stories

  • Pennsylvania woman sentenced in elderly fraud case
  • NY man sentenced for operating a Ponzi scheme, stole more than $1M
  • For agents and advisors, dispelling LTCI myths is crucial to building sales
  • Fed slows interest rate increases; more hikes expected
  • Allstate reports $1.4B loss for 2022; increases rates, policy restrictions
More Top Read Stories >

FEATURED OFFERS

Meet Encova Life
We know agents matter. You can count on our life team to be high tech, high touch and responsive.

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Articles
  • Monthly Focus

Top Sections

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2023 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.