U.S. DOJ and Three States Sue to Block UnitedHealth’s $3.3 Billion Acquisition of Amedisys Over Antitrust Concerns
The U.S. Department of Justice (DOJ), in partnership with attorneys general from Maryland, New Jersey, and New York, has filed a lawsuit to halt UnitedHealth Group’s proposed $3.3 billion acquisition of Amedisys Inc., citing significant concerns over reduced competition in the home health and hospice services industry.
The lawsuit, filed on Tuesday, reflects worries that merging these companies could negatively impact patients, health insurers, and healthcare professionals by diminishing competition in a crucial sector of the healthcare market.
In its statement, the DOJ emphasized, “Eliminating the competition between UnitedHealth and Amedisys would harm patients who receive home health and hospice services, insurers who contract for home health services, and nurses who provide these essential services.”
The agency is concerned that the merger, which would combine UnitedHealth’s Optum division and Amedisys, would strengthen UnitedHealth’s already considerable position in home health services, potentially leading to higher costs and less choice for consumers and providers.
Optum, the health services branch of UnitedHealth, includes offerings like analytics, research, and pharmacy care services.
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In response to the lawsuit, a spokesperson for Optum stated, “The Amedisys combination with Optum would be pro-competitive and drive further innovation. We will vigorously defend against the DOJ’s overreaching interpretation of antitrust laws.” Amedisys also expressed its ongoing commitment to the acquisition, saying, “We look forward to supporting Optum in presenting our case.”
Following the announcement of the lawsuit, UnitedHealth’s shares declined by 1.1% in afternoon trading, while Amedisys’ stock dropped 2.1% to $90.75, falling 10% below UnitedHealth’s offer of $101 per share.
Analysts had previously anticipated regulatory hurdles for this acquisition given UnitedHealth’s significant presence in the home health market. Bloomberg News reported that UnitedHealth and Amedisys executives recently met with the DOJ in an attempt to address these antitrust concerns.
In an effort to allay the DOJ’s apprehensions, Amedisys reportedly proposed selling more than 100 locations in Texas to a private operator if the deal moves forward, according to Stephens analyst Scott Fidel. However, Fidel expressed skepticism, noting that “these remedies do not seem sufficient to satisfy the hardline Biden DOJ… We’ll look to see whether a Trump DOJ decides to pursue or drop this case in 2025.”
This is not UnitedHealth’s first encounter with DOJ scrutiny; in February 2022, the Justice Department filed to block UnitedHealth’s acquisition of Change Healthcare, though the transaction was ultimately completed later that year. The latest lawsuit signals the DOJ’s increasing willingness to challenge large healthcare mergers amid rising concerns over industry consolidation and its impact on patients and healthcare costs.
As the case unfolds, the outcome could have lasting implications for future mergers within the healthcare sector.