After a prolonged struggle, the $3.3 billion acquisition of the home health provider Amedisys by UnitedHealth Group’s Optum division is on the verge of finally being realized. This significant merger holds the potential to reshape the landscape of home healthcare, providing new opportunities for patient care.
The Department of Justice has announced a proposed settlement with both UnitedHealth Group and Amedisys concerning the acquisition deal, as revealed on Thursday. This development marks a crucial step towards finalizing a merger that has garnered considerable attention and scrutiny.
However, the proposed settlement is still pending judicial approval. If approved, it will mandate UnitedHealth and Amedisys to divest 164 home health and hospice locations across 19 states, transferring these assets to BrightSpring Health Services or The Pennant Group, both recognized players in the home health industry. This divestiture, representing approximately $528 million in annual revenue, is poised to be the most extensive divestiture of outpatient healthcare services to resolve a merger challenge, as noted by the DOJ.
“In no sector of our economy is competition more vital to the well-being of Americans than in healthcare. This settlement is designed to safeguard both quality and price competition for hundreds of thousands of vulnerable patients, as well as wage competition for thousands of nurses,” stated Assistant Attorney General Abigail Slater from the Justice Department’s Antitrust Division in a press release.
UnitedHealth may also face additional requirements to divest eight more facilities if it fails to gain approval for selling related assets. Furthermore, the deal includes provisions for appointing a monitor to supervise the divestiture process and ensure adherence to the settlement terms. Notably, Amedisys will incur a penalty of $1.1 million and is required to educate its leadership on antitrust regulations after it mistakenly certified compliance with federal document requests.
The plans for this acquisition were initially unveiled by UnitedHealth Group’s Optum back in 2023. However, the DOJ intervened with a lawsuit in November to halt the acquisition, asserting that it would eliminate competition between UnitedHealth and Amedisys, particularly due to UnitedHealth’s earlier acquisition of home health and hospice provider LHC Group. To facilitate the deal, UnitedHealth and Amedisys have previously executed other divestitures, including one involving VitalCaring Group, but these efforts have proven insufficient.
In response to the proposed settlement, a spokesperson for Optum expressed satisfaction with the resolution, stating, “We are grateful for the cooperation from the Department of Justice. With Amedisys, we are eager to continue making significant advancements in the home health and hospice care sector, an integral aspect of our value-based care approach.”
A spokesperson for Amedisys highlighted that the merger with Optum represents a crucial milestone in the company’s ongoing growth and evolution. They emphasized that this strategic alignment is a significant step forward in their mission to provide exceptional care and innovative solutions to more patients and families in need of home health services.
While both UnitedHealth and Amedisys express optimism regarding the proposed settlement, there are concerns about the potential repercussions for hospice patients and nurses. This includes perspectives from the American Economic Liberties Project, a nonprofit organization dedicated to combating monopolistic practices.
The organization contends that the divestitures to BrightSpring and Pennant may introduce a new set of challenges. Notably, BrightSpring is under the ownership of private equity firm KKR, which is currently embroiled in a separate antitrust lawsuit initiated by the DOJ. Additionally, inspections of BrightSpring’s group homes for individuals with intellectual and developmental disabilities have uncovered serious violations involving abuse, neglect, and staffing shortages. Among its owners, Pennant Group is affiliated with health system Ascension, which has a history of settling with the DOJ over issues related to immigration discrimination.
“This settlement … capitulates to UnitedHealth Group, recognized as one of the most perilous monopolists in American healthcare,” remarked Emma Freer, senior policy analyst for healthcare at the American Economic Liberties Project. “It claims to divest home health and hospice care providers in overlapping markets but, in reality, relinquishes them to similarly conflicted buyers, including a heavily leveraged private-equity firm. Consequently, Big Medicine stands to profit at the expense of vulnerable hospice patients, some of whom may suffer severe consequences, including loss of life, as well as the dedicated workers who care for them.”
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