The Department of Justice is requiring UnitedHealth Group and Amedisys to divest 164 home health and hospice locations across 19 states as part of a proposed settlement agreement.
These facilities, including a palliative care facility, account for approximately $528 million in annual revenue, according to the DOJ. This represents the largest divestiture of outpatient healthcare services to resolve a merger challenge.
UnitedHealth and Amedisys have agreed to the proposed final judgment and stipulation and order in the proposed settlement filed Thursday in federal court in Maryland.
The settlement requires Amedisys to pay a $1.1 million civil penalty for falsely certifying that it had provided "true, correct and complete" responses under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Amedisys is required to train its corporate and field leadership on antitrust compliance.
The proposed settlement has other stipulations, including obligating UnitedHealth to divest eight additional locations if it fails to obtain regulatory approval for the divestiture of the facilities without the additional locations. It also imposes a monitor to supervise UnitedHealth's divestiture of the assets and compliance with the consent decree and other obligations.
The DOJ proposal is meant to resolve claims that the transaction violates sections of the Clayton Act prohibiting anticompetitive practices.
Comments on the proposed settlement will be accepted for 60 days following publication in the Federal Register.
WHY THIS MATTERS
UnitedHealth wants to buy Amedisys in a deal valued at $3.3 billion.
The companies are two of the largest home health and hospice providers in the country.
In July, a Raymond James analyst questioned whether the recently proposed 6.4% payment decrease for home health services could scuttle UnitedHealth's interest in acquiring Amedisys.
The proposed payment decrease represents roughly a $50 million headwind for earnings before interest, taxes, depreciation and amortization (EBITDA) in 2026, said John W. Ransom, managing director, director of Healthcare Research for Raymond James.
THE LARGER TREND
In November 2024, The Department of Justice sued UnitedHealth Group and Amedisys over their planned merger. Plaintiffs also include the states of Maryland, Illinois, New Jersey and New York.
UnitedHealth and Amedisys are direct competitors. The proposed merger between UnitedHealth and Amedisys would forever eliminate that competition, the DOJ said.
It would result in UnitedHealth's control of 30% or more of the home health or hospice services in eight states, according to the lawsuit.
Also, the merger would result in the nation's three largest home health providers being owned by two of the largest Medicare Advantage insurers in the country, UnitedHealthcare and Humana. Humana purchased home health and hospice company Kindred in 2021.
ON THE RECORD
"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.
Email the writer: SMorse@himss.org