After a multi-year battle, the $3.3 billion acquisition of home health provider Amedisys by UnitedHealth Group’s Optum may finally go through.
The Department of Justice (DOJ) has reached a proposed settlement with UnitedHealth Group and Amedisys over the deal, the agency announced on Thursday.
The proposed settlement still has to be approved by a judge. It would require UnitedHealth and Amedisys to divest 164 home health and hospice locations across 19 states to BrightSpring Health Services or The Pennant Group, which are both home health companies. This accounts for about $528 million in annual revenue, and would be the largest divestiture of outpatient healthcare services for resolving a merger challenge, according to the DOJ.
“In no sector of our economy is competition more important to Americans’ well-being than healthcare. This settlement protects quality and price competition for hundreds of thousands of vulnerable patients and wage competition for thousands of nurses,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division, in a statement.
UnitedHealth may also be required to divest eight more facilities if it can’t secure approval for selling related assets. In addition, the deal also installs a monitor to oversee the divestiture process and ensure compliance. And Amedisys will pay a $1.1 million penalty and train its leadership on antitrust rules after falsely certifying it had fully responded to federal document requests.
UnitedHealth Group’s Optum first announced plans for the deal back in 2023, but the DOJ filed a lawsuit in November to block the acquisition, arguing that it would remove competition between UnitedHealth and Amedisys due to UnitedHealth’s previous acquisition of home health and hospice company LHC Group. UnitedHealth and Amedisys have made other divestitures in the past in hopes of getting the deal through — including a deal to VitalCaring Group — but they weren’t enough.
In response to the proposed settlement, an Optum spokesperson said the company is “pleased to have reached a resolution and are grateful for the Department of Justice’s cooperation. With Amedisys, we look forward to continuing meaningful improvements in the home health and hospice care space, a vital part of our value-based care approach.”
A spokesperson for Amedisys noted that the merger with Optum “will mark a significant milestone in the continued growth and evolution of Amedisys. This strategic alignment represents an important step forward in our mission to deliver exceptional care and innovative solutions within the home to even more patients and families.”
While UnitedHealth and Amedisys seem pleased with the proposed settlement, others are concerned about the impact on hospice patients and nurses. This includes the American Economic Liberties Project, a nonprofit that combats monopolistic corporations.
The organization argues that the divestitures to BrightSpring and Pennant create a new set of problems. BrightSpring is owned by private equity firm KKR, which is currently dealing with a separate antitrust lawsuit from the DOJ. In addition, inspections of its group homes for people with intellectual and developmental disabilities found serious violations involving abuse, neglect, and understaffed caregivers. One of the Pennant Group’s owners is health system Ascension, which previously settled with the DOJ over immigration-related discrimination.
“This settlement … caves to UnitedHealth Group, one of the most dangerous monopolists in American health care,” said Emma Freer, senior policy analyst for health care at the American Economic Liberties Project. “It claims to divest home health and hospice care providers in overlapping markets but, in actuality, cedes them to similarly conflicted buyers, including a highly-leveraged private-equity firm. As a result, Big Medicine will profit at the expense of vulnerable hospice patients, some of whom will pay with their lives, and the workers who care for them.”
Photo: alexsl, Getty Images
