UnitedHealth Group on April 16 held its first earnings call since it reported the cyberattack of its Change Healthcare subsidiary. On the call, CEO Andrew Witty called Change an important acquisition for the company, adding "I think [it's] important for the country that we own Change Healthcare."
"This attack would likely still have happened and it would have left Change Healthcare, I think, extremely challenged to come back," Mr. Witty said on the call, according to an April 16 transcript from Motley Fool. "Because it was a part of UnitedHealth Group, we've been able to bring it back. We're going to bring it back much stronger than it was before."
UnitedHealth Group closed its acquisition of Change Healthcare, the largest claims clearinghouse in the U.S., in October 2022, after a legal battle with the Justice Department.
UnitedHealth announced its deal to acquire the company and merge it with Optum's OptumInsight unit in January 2021. The move was met by resistance from the American Hospital Association, who in March of that year called on the Justice Department to investigate the deal. The AHA said the transaction would result in a loss of market competition for claims clearinghouses, payment accuracy, revenue cycle management and clinical decision support services. The AHA was also worried the deal would consolidate much of the country's healthcare data from Change Healthcare, a neutral third party, to a single, powerful owner. The Justice Department responded by asking for more information on the deal.
The Justice Department ultimately sued to block the deal in February 2022. Attorney General Merrick Garland said in a statement announcing the lawsuit that "if America's largest health insurer is permitted to acquire a major rival for critical healthcare claims technologies, it will undermine competition for health insurance and stifle innovation in the employer health insurance markets."
A federal bench trial over the Justice Department's challenge of the deal was held in August 2022. The Justice Department argued that the merger was anticompetitive because Change has access to data from insurer customers. UnitedHealth Group argued Optum is separate from its insurance arm, UnitedHealthcare, and the deal should go through because there are policies in place to protect sensitive data.
In closing arguments, attorneys representing the government argued that the deal would give UnitedHealth "unprecedented power" over claims payments. U.S. District Judge Carl Nichols suggested that another company would eventually arise to compete in claims processing anyway, so the merger would not create a monopoly. The judge ultimately ruled in UnitedHealth's favor.
The federal government is continuing to scrutinize UnitedHealth Group. The Justice Department has reportedly opened an antitrust investigation and has been interviewing healthcare industry representatives in UnitedHealth competition sectors. Investigator questions during the interviews have included specific relationships between the company's UnitedHealthcare insurance unit along with its Optum health-services arm, which owns physician groups along with additional assets.
Neither the Justice Department or UnitedHealth Group has publicly commented on the investigation. During the Change Healthcare bench trial, Mr. Witty said OptumInsight and the other companies under the Optum umbrella are kept "strictly at arms' length," adding that the insurer and unit operate in a supplier-purchaser relationship rather than as two parts of an enterprise.
UnitedHealth is also drawing the ire of federal lawmakers, who held their first hearing on the fallout of the cyberattack April 16.
"The FTC has failed the American people by allowing vertical integration to happen, and it needs to be busted up," Rep. Buddy Carter said during the hearing.