UnitedHealth Group and Amedisys have closed their $3.3 billion merger deal just days after a settlement agreement with the Department of Justice that allowed the deal to go through, with some conditions.
The deal was finalized on Thursday, according to a filing from the Securities and Exchange Commission.
Amedisys, a home health company, will now be a wholly owned subsidiary of UnitedHealth, joining the company under the Optum umbrella.
To finalize the merger, the DOJ required the two companies – which have historically been competitors – to divest 164 home health and hospice locations across 19 states. 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.
WHAT’S THE IMPACT
In June 2023, the two companies agreed to the $3.3 billion planned merger, with Amedisys becoming a wholly owned subsidiary of UnitedHealth Group.
But last November, the DOJ sued the companies over anticompetitive concerns. Amedisys was the largest home health and hospice company in the country as of 2022, the lawsuit said, and since it was a direct competitor with UnitedHealth, the merger would forever eliminate that competition, the DOJ said at the time.
It would result in UnitedHealth's controlling 30% or more of the home health or hospice services in eight states, according to the lawsuit. It would result in the nation's three largest home health providers being owned by the two of the largest Medicare Advantage insurers in the country, UnitedHealthcare and Humana. Humana purchased home health and hospice company Kindred in 2021.
The settlement that eventually allowed the deal to move forward 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 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 LARGER TREND
Over the past three years, UnitedHealth has spent more than $36 billion acquiring companies in a variety of healthcare settings. It is the largest commercial health insurer in the United States, the largest employer of physicians, the second-largest pharmacy benefit manager and one of the largest healthcare technology and service vendors, according to the DOJ’s original lawsuit.