Dive Brief:
- UnitedHealth has closed its $3.3 billion acquisition of home health and hospice provider Amedisys, the companies disclosed Thursday, capping off a two-year battle with antitrust regulators.
- The deal, which will fold Amedisys into UnitedHealth’s health services division Optum, marks a significant expansion of UnitedHealth’s home health capabilities — one so large that the Department of Justice sued to block the deal late last year, arguing it would decimate competition for the services in hundreds of U.S. markets.
- But UnitedHealth, Amedisys and the DOJ reached a settlement roughly one week ago, clearing the way for the deal to be finalized. Amedisys stopped trading on Nasdaq on Thursday, citing the deal’s closure.
Dive Insight:
Amedisys agreed to be acquired by UnitedHealth in 2023, after the Minnesota-based healthcare giant outbid a preexisting deal with Option Health Care. However, the the DOJ requested more information on the merger two months later and, after a divestiture offer from Amedisys and UnitedHealth failed to assuage regulators’ concerns, the department sued to block the deal in November.
However, the parties reached a settlement deal on Aug. 7 requiring UnitedHealth and Amedisys to sell 164 home health and hospice locations in return for the DOJ’s blessing. The settlement was weaker than some antitrust lawyers expected, though the DOJ said it would preserve both price and wage competition.
A judge signed the settlement on Monday, clearing the path for UnitedHealth and Amedisys to officially close their merger, according to an Optum spokesperson.
“We’re pleased Optum’s combination with Amedisys has closed,” the spokesperson said over email, adding that home health is “critical” to Optum’s commitment to keeping patients healthy.
Analysts and market experts say that Amedisys will only be a modest contributor to UnitedHealth's earnings, but will help the company’s vertical integration strategy, where UnitedHealth benefits from the interplay between its UnitedHealthcare insurance arm and its healthcare delivery assets.
With the merger, UnitedHealth becomes a serious contender in home health and hospice services — and potentially the largest in the U.S. as well, according to experts.
The company already owns LHC Group, which offers home health and hospice care in dozens of states, after acquiring the provider for $5.4 billion in 2023. Similarly, Amedisys provides the services to more than 465,000 patients each year across 38 states and Washington, D.C.
Last week, a group of Democrat lawmakers released a statement slamming the DOJ’s settlement, arguing it fails to protect competition and augurs higher costs and reduced care access to home health and hospice care.
“This settlement is a failure by the DOJ to do their job and protect Americans from the dangers of a monopolized healthcare system. It’s a clear signal that the system is rigged in favor of wealthy corporations,” the lawmakers said.
One day before the settlement was announced, two influential Democrat senators launched an investigation into UnitedHealth’s care for nursing home residents, following reports that the healthcare behemoth was restricting hospitalizations in order to protect its profits. UnitedHealth is also facing criminal and civil investigations by the DOJ for alleged Medicare fraud and is being sued by the Federal Trade Commission for allegedly driving up the price of insulin in the U.S.
