The Justice Department filed a civil lawsuit Thursday to block UnitedHealth Group's proposed acquisition of Change Healthcare, a $13 billion deal the federal government says could potentially harm millions of Americans by lowering the quality of health insurance while making coverage more costly.

The lawsuit highlights UnitedHealth Group's ownership of UnitedHealthcare, which is the nation's largest health insurer. Calling the Minnetonka-based company a "behemoth," the complaint argues that UnitedHealth would amass too much power in the arcane and competitively sensitive world of electronic data transactions between carriers and health care providers.

The deal to buy Nashville-based Change Healthcare, first announced in January 2021, would damage competition in the market for key technologies used by insurers to process claims and reduce health care costs, the suit alleges. Attorneys general in Minnesota and New York are joining the Justice Department in the litigation.

"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," U.S. Attorney General Merrick Garland said in a news release. "The Justice Department is committed to challenging anticompetitive mergers, particularly those at the intersection of health care and data."

UnitedHealth Group countered in a statement Thursday that the acquisition would help lower costs by increasing efficiency and reducing friction across the health care system.

"The department's deeply flawed position is based on highly speculative theories that do not reflect the realities of the health care system," the company said. "We will defend our case vigorously."

The lawsuit scrutinizes an acquisition that seems in keeping with a well-established pattern at UnitedHealth Group. For decades, the company's Optum division has achieved outsized growth by selling products to the health insurance rivals of UnitedHealthcare and/or the hospitals and clinics that must negotiate payment rates with the giant health insurer.

UnitedHealth Group executives have stressed over the years how UnitedHealthcare and Optum operate as separate units, so customer information isn't passed between the two divisions.

With the proposed acquisition, Change Healthcare would become part of OptumInsight, a business unit that sells technology and data consulting services to insurers and health care providers. Optum has two other units — one that runs outpatient medical centers and another that's a pharmaceutical benefits manager.

The lawsuit, which was filed in the U.S. District Court for the District of Columbia, argues that Change Healthcare provides technology that's essential to rival health insurers that are trying to compete with UnitedHealthcare.

The complaint asserts that Change Healthcare operates the nation's largest electronic data interchange (EDI) clearinghouse, which health care providers use to submit claims for payment and insurers use to provide remittances. Taken together, the information is known as claims data, the lawsuit says, and the information "provides a window into the inner workings of the health insurers and their plans."

The Justice Department says EDI clearinghouses are sometimes described as the data "pipes" that allow for the transfer of key business information between insurers and health care providers. The complaint cites a United estimate that about 50% of all medical claims in the U.S. pass through the EDI clearinghouse at Change Healthcare.

UnitedHealth operates its own clearinghouse, according to the lawsuit, and "actively avoids placing its own competitively sensitive claims data in the hands of its actual or potential health insurance competitors."

"Through ownership of Change's EDI 'pipes' ... United would have access and the right to use the claims data of health insurer rivals ...," the lawsuit asserts. "United would likely also use this EDI information advantage to identify which national accounts and large group employers are better insurance risks (and thus most profitable)."

The lawsuit says Change Healthcare also sells "claims-editing" technology that lets health insurers process, in real time, millions of claims to make sure they are eligible for payment according to the terms negotiated by health plans. As such, Change Healthcare has access to "proprietary payment rules for all of United's most significant health insurance competitors," according to the lawsuit.

Health insurers consider this information to be competitively sensitive, the lawsuit states, because it reveals how insurers structure the health plan products they sell to large employers. It's also how carriers differentiate themselves from competitors, the Justice Department says.

Currently, the two companies are rivals in selling technology for "first-pass" claims editing, but the lawsuit asserts that United's market share would grow to more than 75% with the acquisition. That would leave other health insurers "at the mercy of a vertically integrated monopolist that has every incentive to raise prices and reduce quality and innovation," according to the lawsuit.

"United's major rival health insurers rely on Change for its innovative, high-quality products, including claims editing technology and EDI clearinghouse, avoiding United's claims editing and clearinghouse products to protect their competitively sensitive data from their largest rival," according to the lawsuit.

"United is well aware of its rivals' reluctance to use United's EDI clearinghouse and claims editing products. OptumInsight euphemistically refers to this reluctance as the 'U-factor' — a reference to United's insurance business."

In a statement Thursday, Minnesota Attorney General Keith Ellison stressed that Change Healthcare is currently not affiliated with any health care provider or insurer.

"This proposed merger ... 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," Ellison said. "Minnesotans and consumers everywhere should have full access to health care they can afford — not have health insurance companies attempting to undermine that through monopolistic market dominance."

On Thursday, the American Hospital Association issued a statement of support for the Justice Department's action, saying the proposed acquisition would allow "a massive concentration of sensitive health care data in the hands of a single, powerful owner with an inherent conflict of interest."