UnitedHealth, Change Healthcare extend merger agreement, adding $650M breakup fee if DOJ suit prevails
UnitedHealth Group and Change Healthcare are extending their merger agreement through the end of 2022, despite efforts by the Department of Justice to block their union.
The two healthcare heavyweights also revealed Tuesday that UHG subsidiary Optum has agreed to pay Change a $650 million breakup fee if the DOJ lawsuit derails the deal.
“The extended agreement reflects our firm belief in the potential of our combination to improve healthcare, and in our commitment to contesting the meritless legal challenge to this merger,” the two said in a joint statement issued Tuesday, April 5.
Attorney General Merrick Garland and colleagues sued to stop the UnitedHealth’s $13 billion acquisition of Change in February. He argued the pact would undermine competition while stifling innovation in the employer health insurance market. Numerous other stakeholders have spoken against the proposal, including the American Medical Association, the National Community Pharmacists Association, the American Antitrust Institute and the American Hospital Association.
Nashville-based Change and Eden Prairie, Minnesota’s UHG said they plan to explain the benefits of uniting during a two-week trial slated to start Aug. 1. In Tuesday’s announcement, they argued the combined company could simplify the administrative and payment process providers count on to serve patients.
“Increasing efficiency and reducing friction will benefit the entire health system, resulting in lower costs and a better experience for all stakeholders,” the two wrote.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.