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DOJ and States File Suit to Block UnitedHealth’s $3.3B Acquisition of Amedisys

By  |  November 12, 2024

The U.S. Justice Department, along with the attorneys general of Maryland, New Jersey, and New York, filed a lawsuit on Tuesday aimed at blocking UnitedHealth Group’s $3.3 billion acquisition of Amedisys. According to Reuters, the government officials raised concerns that the merger could reduce competition in the home health services market, which would ultimately harm both patients and service providers.

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    In a statement, the Justice Department explained that eliminating 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 home health and hospice services.” The lawsuit reflects a broader concern about the potential consolidation of power within the home healthcare industry, which could limit consumer choice and raise costs for insurers.

    Reuters reports that neither UnitedHealth nor Amedisys immediately responded to requests for comment on the lawsuit. Following the announcement, shares of UnitedHealth fell 1.5%, while Amedisys’ stock dropped 1.3% to $91.50, now over 9% lower than UnitedHealth’s $101-per-share offer.

    Related: UnitedHealth and Amedisys Prepare for Key Antitrust Meeting with DOJ

    The proposed acquisition, first announced last year, had already raised concerns about regulatory scrutiny due to UnitedHealth’s significant presence in the home health sector. Analysts had anticipated that the Justice Department would closely examine the deal, and a recent meeting between executives from both companies and the department’s officials only heightened these expectations, as reported by Bloomberg News.

    To address antitrust concerns, Amedisys proposed selling over 100 of its locations to a private operator in Texas if the deal is approved, according to Reuters. However, Stephens analyst Scott Fidel expressed doubts about whether this would be enough to overcome the concerns of the Biden administration’s tough stance on antitrust issues. “These remedies do not seem sufficient to satisfy the hardline Biden DOJ,” he said. “Clearly, we’ll look to see whether a Trump DOJ decides to pursue or drop this case in 2025.”

    This legal challenge is not the first time the Justice Department has taken aim at a major healthcare deal. In 2022, the department sued to block UnitedHealth’s acquisition of Change Healthcare, though the transaction ultimately went through later that year. According to Reuters, the outcome of the current case will likely influence future regulatory decisions regarding mergers in the healthcare sector.

    Source: Reuters