The Department of Justice is reportedly prepping a lawsuit to block UnitedHealth Group’s (NYSE: UNH) takeover of Amedisys (Nasdaq: AMED).

Bloomberg first reported the news. Its report, citing anonymous sources, says that the Amedisys and UnitedHealth Group leaders did meet with DOJ officials last week. That meeting did not change the DOJ’s mind, however.

UnitedHealth Group’s Optum agreed to acquire Amedisys for $3.3 billion in June of 2023. Since, DOJ officials – and state governments – have requested more information around the deal and scrutinized it. That scrutiny could finally be coming to a head this week.

Specifically, the DOJ believes that the deal would “harm competition in the market for home health services,” according to Bloomberg’s sources. Optum acquired LHC Group for $5.4 billion in February of 2023. Were Optum and Amedisys to combine under one umbrella, UnitedHealth Group and Optum would own close to 10% of the home health market.

While that is not a huge slice of the pie, it’s the overlap in markets where LHC Group and Amedisys both operate that reportedly concern the DOJ.

“Antitrust enforcers are concerned the combination could lead to higher prices in home health care in regions where Amedisys is a main competitor to UnitedHealth’s LHC Group,” the Bloomberg report read.

Amedisys has agreed to divest a chunk of its locations to VitalCaring in order to get ahead of that issue.

The move apparently was not enough in the DOJ’s eyes.

Importantly, that VitalCaring deal will only close if the UnitedHealth Group-Amedisys deal also closes.

Overall, the Baton Rouge, Louisiana-based 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. It and LHC Group are two of the largest home health entities in the country.

If the Amedisys deal goes through, Optum would be the largest home health provider in the country, by a significant margin. 

DOJ officials have come after UnitedHealth Group over transactions they deemed anticompetitive in the past. The Biden administration, in particular, has keyed in on the prolific acquirer. Even though the Biden administration is transitioning out of power in January, the DOJ is reportedly proceeding with its efforts to block the Amedisys deal.