UnitedHealth Group, Amedisys Set For All-Important Meeting With DOJ Officials

UnitedHealth Group (NYSE: UNH) and Amedisys (Nasdaq: AMED) leaders are reportedly expected to meet with officials from the Department of Justice over the next week to discuss their pending deal. The companies will likely make a final case for why the deal should go through, while the DOJ considers whether to officially file a lawsuit to block it. 

Bloomberg first reported on the meeting, which could commence as early as Monday, according to sources “familiar with the matter.”

UnitedHealth Group agreed to acquire Amedisys in June of 2023 for $3.3 billion. Since then, they have been waiting for approval from the DOJ, which has requested further information on the deal and began considering a lawsuit early this year.

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States have also scrutinized the transaction, but would likely fall behind the DOJ if it blessed the deal.

UnitedHealth Group has its insurance arm, UnitedHealthcare, and its health care services arm, Optum. Optum, specifically, is acquiring Amedisys, which is one of the largest home health providers in the country. Optum also owns LHC Group – another home health giant – which it acquired for $5.4 billion in February of 2023.

With Amedisys and LHC Group under its umbrella, Optum would own close to 10% of the home health market.

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In order to mitigate antitrust concerns, Amedisys has agreed to divest a certain amount of its locations to the PE-backed home health provider VitalCaring. The exact number of locations has not been settled, but it could be over 100, according to previous reports. That deal will only take effect if the UnitedHealth Group takeover of Amedisys goes through.

Based in Baton Rouge, Louisiana, Amedisys has 521 care centers in 37 states and the District of Columbia. It offers home health, hospice, palliative and home-based high-acuity care.

The upcoming meeting will include Jonathan Kanter, according to Bloomberg. Kanter is the assistant attorney general for the DOJ’s Antitrust Division.

It could end up with the DOJ suggesting more alterations to the deal, including more Amedisys locations being offloaded. It could also end up with no resolution, which would likely lead to a DOJ lawsuit. The DOJ needs to decide whether to file that lawsuit by the end of the month.

Broadly, the deal has raised eyebrows for a number of reasons. Firstly, UnitedHealth Group – a prolific acquirer – has already been under DOJ investigation over antitrust concerns.

On the home health front, the industry has been historically fragmented. With close to 10% of the market, Optum would be by far the largest home health provider in the country.

There’s also concerns over an insurance company owning such a large part of the home health market. Those that have raised red flags around the deal have suggested that could lead to anti-competitive practices.

A comment on the deal, from the Oregon Health Authority’s (OHA) website, sums up these worries aptly.

“We are concerned that [UnitedHealth] as an insurer, and through Optum as a clinical provider and potentially as a home health and hospice provider, have the incentive and the ability to unfairly disadvantage competing providers and drive them from the market, reducing consumer choice,” the Corvallis, Oregon-based Mid Valley Health Care Advocates wrote.

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