UnitedHealth Group has completed its acquisition of Tennessee-based Change Healthcare, a $13 billion deal the Justice Department unsuccessfully tried to block on competitive grounds.
Change Healthcare is a health care data firm that's now a part of Optum, the division for health care services at Minnetonka-based UnitedHealth Group.
Last month, a judge in the U.S. District Court for Washington, D.C., ruled the government failed to show during a two-week trial that the acquisition would substantially diminish competition.
"The combination will connect and simplify the core clinical, administrative and payment processes health care providers and payers depend on to serve patients," the company said in a statement on Monday. "Increasing efficiency and reducing friction will benefit the entire health system, resulting in lower costs and a better experience for all stakeholders."
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.
In February, the Justice Department filed a lawsuit alleging the merger could potentially harm millions of Americans by lowering the quality of health insurance while also making coverage more costly.
The government asserted that UnitedHealth — with control of the clearinghouse — would harm competition through its access to rival health insurers' competitively sensitive information.
But Judge Carl Nichols determined the government didn't make its case that the company would either "misuse" the data to promote its own health insurance business or to raise rivals' costs and limit innovation.
"United's incentives are not nearly as one-sided as the government suggests," he wrote.
UnitedHealth Group runs UnitedHealthcare, which is the nation's largest health insurer, as well as Optum, which has a "multi-payer" strategy of both providing services to the in-house benefits business and selling them to outside customers. The success of this strategy depends on customers trusting that their data "will not fall into the hands" of UnitedHealthcare, Nichols wrote.
Evidence presented at the trial shows UnitedHealth Group had developed a corporate culture committed to upholding that trust, the judge wrote, and there's no evidence Optum has used competitor data it can already access in order to benefit UnitedHealthcare.
Contractual obligations with customers and the company's internal "firewalls" prevent information from being shared between Optum and UnitedHealthcare, Nichols wrote. Abandoning those protections would be costly, the judge added, since outside customers last year "accounted for around $63 billion in Optum revenue across all three business units."
The three Optum divisions referenced are data consulting services, direct patient care and pharmaceutical benefits management.
"The court finds that United will have strong legal, reputational and financial incentives to protect rival payers' [competitively sensitive information] after the proposed merger," Nichols wrote. "The evidence established that the government's claim fails to account for all of United's post-merger incentives, including its incentives to preserve its multi-payer business model."
The judge also found that "the government provided zero real-world evidence that rival payers are likely to reduce innovation."
Nichols denied the Justice Department's request to block the merger while ordering the completion of a previously announced divestiture of Change Healthcare's business in claims editing systems. That technology lets health insurers process millions of claims, in real time, to make sure they are eligible for payment under the terms negotiated by health plans.