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Update on United’s acquisition of Change Healthcare: Shareholders and providers expressing concern

On January 19, Yahoo Finance reported that shareholders are asking questions about United’s acquisition of Change Healthcare. And they're not the only ones. This week, we're taking a closer look at what United could gain with this acquisition and why it's concerning.

In early January, we shared our point of view on UnitedHealthcare’s planned acquisition of the data company, Change Healthcare. To no one’s surprise (at least not ours), there is some controversy surrounding the acquisition and its impact on various stakeholders, as well as the healthcare industry as a whole.

One of the first groups to speak out was Brodsky & Smith, LLC, on behalf of Change’s stockholders. The law firm has launched an investigation to determine if the “Change Healthcare Board breached its fiduciary duties to shareholders.” The basis of the suit claims that the board did not conduct a fair process and that United isn’t paying enough for the company. This suit, while important, is only one layer of opposition to the deal.

As expected, providers are also expressing concerns. The reason? Change owns InterQual, a clinical decision-making tool that leverages artificial intelligence (AI) to help providers and clinical staff determine the right level of care and most appropriate resources. Because United has a reputation for being in the business of denying claims (like mental health care) and making seemingly arbitrary calls about what constitutes medical necessity, some worry that they will manipulate the InterQual algorithm. In other words, once United owns Change, they may no longer have to wait until care is delivered to deny the claim; they can move further upstream into physicians’ realm and ensure that the care isn’t delivered in the first place.

This isn’t just about patients accessing the care they need, it’s also about the fear that United could be interfering with the trusted physician/patient relationship. Patients trust their doctors to provide counsel and care based on their individual needs and circumstances. Now, at least some of those decisions will be dictated by AI that is owned by an insurance company, which directly benefits when patients get less care. If 2020 proved anything, it is that insurers profit when their members delay or simply do not receive care.

To be clear, there is absolutely no evidence that United intends to manipulate InterQual, but the fact that some providers are worried about this is an indicator of just how poorly they view insurers. In short, United’s track record means that we—and many others—feel the need to pay close attention to this deal.

Original Article:

BALA CYNWYD, PA / ACCESSWIRE / January 19, 2021 / Law office of Brodsky & Smith, LLC announces that it is investigating potential claims against the Board of Directors of Change Healthcare Inc. ("Change Healthcare" or the "Company") (NASDAQ:CHNG) for possible breaches of fiduciary duty and other violations of federal and state law in connection with the agreement to be acquired by United Health Group Incorporated.

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