Justice Department sues to block UnitedHealth Group’s $3.3 billion purchase of Amedisys

NEW YORK (AP) — The Justice Department is suing to block UnitedHealth Group’s $3.3 billion purchase of Amedisys, citing concerns the combination would hinder access to home health and hospice services in the U.S.

The antitrust complaint, filed in Maryland by the Justice Department and four states’ attorneys general Tuesday, argues that a potential merger is illegal because the two companies are “such large competitors” already — and the deal would give UnitedHealth too much control in many local markets.

That would mean less choice for patients looking for affordable care, the suit alleges, as well as fewer employment options for nurses seeking competitive pay and benefits.

“American healthcare is unwell,” Assistant Attorney General Jonathan Kanter of the Justice Department’s antitrust division, said in a prepared statement. “Unless this $3.3 billion transaction is stopped, UnitedHealth Group will further extend its grip to home health and hospice care, threatening seniors, their families and nurses.”

Tuesday’s lawsuit follows UnitedHealth’s acquisition of LHC Group Inc., another home health and hospice provider. Since that transaction’s completion last year, the Justice Department said, UnitedHealth and Amedisys have emerged as two of the largest providers of home health and hospice care in the country.

The complaint alleges that UnitedHealth’s plan to acquire Amedisys is the result of “an intentional, sustained strategy of acquiring, rather than beating, competition.” After completing the LHC acquisition, the suit says UnitedHealth prevented Amedisys’ 2023 plans to merge with infusion provider OptionCare by paying a “breakup fee” — and then separately made its own acquisition offer, which Amedisys eventually accepted.

UnitedHealth is seeking to add Amedisys to Optum, its subsidiary that provides care as well as pharmacy and technology services. In a response Tuesday to the antitrust suit, Optum said the transaction “would be pro-competitive and further innovation.” It said it plans to “vigorously defend (itself) against the DOJ’s overreaching interpretation of the antitrust laws.”

Amedisys added that it also remains committed to the deal, which it believes “will create more opportunities to deliver quality, compassionate and value-based care to patients and their families.”

In details about the deal published on Optum’s website, the company maintained Optum and Amedisys “would operate just a fraction” of all home health and hospice care markets nationwide when combined. Optum also noted plans to divest some of its care centers to home health provider VitalCaring upon the deal’s completion. It said the divestments would aid competition but the Justice Department said that the proposal is inadequate.

Beyond its Optum unit, UnitedHealth Group also runs one of the nation’s largest health insurers, UnitedHealthcare. The Minnesota-based healthcare giant reported third-quarter net income of $6.06 billion on revenue of $100.82 billion.

Louisiana-based Amedisys reported third-quarter earnings of $16.9 million and a revenue of $587.7 million for the period.

Tuesday’s lawsuit arrives in the final months of the Biden administration, which has been particularly aggressive in antitrust enforcement. In recent years, the Justice Department has also targeted companies accused of engaging in illegal monopolies and driving up prices across industries like entertainment, travel and tech.

The four states’ attorneys general joining Tuesday’s suit against UnitedHealth and Amedisys are from Maryland, Illinois, New Jersey and New York.