The Justice Department is appealing a September ruling that found the government failed to show how an acquisition by UnitedHealth Group would harm competition.
Last month, Minnetonka-based UnitedHealth closed on its $13 billion deal to acquire Change Healthcare, a health care data firm based in Tennessee, following the ruling from U.S. District Court Judge Carl Nichols.
On Friday, the Justice Department said it was appealing to the U.S. Court of Appeals for the District of Columbia Circuit.
Minnesota and New York joined the appeal. The states also joined the Justice Department when it first filed the lawsuit in February.
In a statement, UnitedHealth Group called the appeal “entirely without merit.”
“After nearly two years of regulatory review, a full trial and a favorable court decision, we closed the transaction on October 3, and are executing on our vision to achieve a simpler, more intelligent and adaptive health system for patients, payers and care providers,” the company said.
Change Healthcare operated the nation’s largest electronic data interchange clearinghouse, which health care providers use to submit claims for payment and insurers use to provide remittances. The Justice Department alleged the merger could potentially harm millions of Americans by lowering the quality of health insurance while also making coverage more costly.
But Nichols ruled the government didn’t make its case that UnitedHealth Group would misuse the data either 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,” the judge wrote.
UnitedHealth Group runs UnitedHealthcare, which is one of the nation’s largest health insurers, as well as Optum, which has a “multi-payer” strategy of both providing services to the in-house benefits business as well as selling them to outside customers. The success of this multi-payer strategy depends on customers trusting that their data “will not fall into the hands” of UnitedHealthcare, Nichols wrote.