The U.S. Department of Justice (DOJ) is seeking to block UnitedHealth Group’s $3.3 billion acquisition of home health provider Amedisys, which was set to be folded into UnitedHealth’s Optum subsidiary. The deal has sparked antitrust concerns, with the DOJ arguing that the merger would significantly reduce competition in the home health and hospice services market and potentially lead to higher prices for patients.
UnitedHealth, which planned to integrate Amedisys into its Optum subsidiary, has faced scrutiny from regulators since announcing the deal in June 2023. The DOJ’s main concern revolves around the potential for monopolistic control in local home health markets where both companies operate, particularly given UnitedHealth’s previous acquisition of LHC Group in 2023.
According to the DOJ, the deal would give UnitedHealth too much market power, potentially driving up costs for vulnerable patients in need of home health services, such as those recovering from hospitalization or managing chronic conditions like heart disease and diabetes.
“We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” said Attorney General Merrick B. Garland. “The Justice Department will not hesitate to check unlawful consolidation and monopolization in the healthcare market that threatens to harm vulnerable patients, their families, and health care workers.”
In response, UnitedHealth proposed selling more than 100 clinics to VitalCaring, another home health provider, in an attempt to alleviate competition concerns. However, the DOJ dismissed this solution, arguing that VitalCaring lacked the experience to effectively compete with a merged UnitedHealth-Amedisys entity.
The lawsuit also raises issues beyond pricing, noting the potential for diminished employment opportunities for nurses in regions where the companies overlap. States such as Maryland, Illinois, New Jersey and New York have joined the DOJ in challenging the acquisition.
Despite these legal hurdles, Amedisys and UnitedHealth remain committed to the deal. In a statement, Optum said it was committed to the merger and called the DOJ’s move “an overreaching interpretation” of antitrust laws.
“The Amedisys combination with Optum would be pro-competitive and further innovation, leading to improved patient outcomes and greater access to quality care,” the company said.
As the DOJ continues its scrutiny, the healthcare industry will be closely watching this case, as it reflects broader concerns over consolidation in the home health market, particularly with increasing private equity interest in the sector.
