U.S. District Judge Carl Nichols ruled for the companies in an opinion that he kept under seal for now because he said it “may contain competitively sensitive information.” The judge said he would release a redacted public version of the ruling in the coming days. In a one-page public order, he denied the Justice Department’s request to block the companies from completing the deal.
The court ruling represents an early blow to stepped-up antitrust enforcement by the Biden administration, which sued in February to block the deal. The Justice Department’s top antitrust official,
Jonathan Kanter,
said the department disagreed with the decision and was considering its next steps.
“Protecting competition and access to affordable healthcare is of the utmost importance to the antitrust division and the Department of Justice,” Mr. Kanter said.
The decision is a triumph for UnitedHealth, which owns the largest U.S. health insurer and a healthcare operation that comprises thousands of doctors as well as clinics, surgery centers and other assets, along with a powerful conglomeration of health data.
In a statement, a UnitedHealth spokesman said, “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.”
Change provides services related to payment processes for healthcare systems, analytics for financing and billing and tools that help hospitals make decisions about patient care.
UnitedHealth had agreed to divest business assets related to claims-processing to address competition concerns, an offer the Justice Department had dismissed as insufficient.
Judge Nichols in his order required UnitedHealth to make that divestiture.
UnitedHealth’s deal for Change, announced in January 2021, will bring the health-technology company under the company’s Optum health-services arm. UnitedHealth had argued that its combination with Change could help improve care by getting better information to doctors, and reduce waste. It agreed to pay nearly $8 billion for Change and assume about $5 billion in debt.
The Justice Department had argued that the deal would give UnitedHealth a virtual monopoly on an important tool that health insurers use to determine when a claim should be paid. And it said the company shouldn’t be allowed to own Change Healthcare’s data clearinghouse, which rival insurers use to compete with UnitedHealth.
The judge, an appointee of former President
Donald Trump,
signaled his skepticism of the lawsuit in a hearing earlier this month. A trial took place in August.
The lawsuit was part of an early batch of antitrust cases brought by the Justice Department under President Biden, a Democrat, that were designed to take a harder line on corporate deal activity. Among other cases, the department is waiting on a ruling in its challenge to a major publishing industry deal, Penguin Random House’s planned acquisition of Simon & Schuster. And it is preparing to go to trial next week in its lawsuit challenging a partnership between
American Airlines Group Inc.
and
JetBlue Airways Corp.
The current crop of antitrust officials, backed by calls from Democrats for a more aggressive approach, have sought to set new court precedents that would steer the law in a broader direction, after years of rulings in which the judiciary has tended to read the antitrust laws more narrowly than a generation ago. Monday’s decision served as a reminder that the Justice Department’s goals are dependent on proving their cases in front of a judge.
The Federal Trade Commission, which shares antitrust authority with the department, also is facing hurdles. It recently lost a ruling from its own in-house administrative law judge, in a case where it was challenging
Illumina Inc.’s
acquisition of cancer-testing developer Grail Inc.
Monday’s decision comes as UnitedHealth and its rivals have continued to move more deeply into vertical integration of health assets, spanning insurance and healthcare provider businesses, as well as pulling together ever-larger troves of health data.
Even after the Justice Department filed suit to block the Change deal, UnitedHealth moved ahead with other acquisitions, including a $5.4 billion takeover of home-health company
LHC Group Inc.
announced last March.
Earlier this month,
CVS Health Corp.
—the parent of health insurer Aetna, a pharmacy-benefit operation and its eponymous drugstores—announced an $8 billion deal to take over home-healthcare company Signify Health Inc. CVS has said it wants to get deeper into the business of primary care.
Write to Anna Wilde Mathews at anna.mathews@wsj.com and Brent Kendall at brent.kendall@wsj.com
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