DOJ Sues To Block UnitedHealth's $3.3B Amedisys Acquisition
The Justice Department and four Democratic state attorneys general on October 12, 2024, filed an antitrust lawsuit against the giant UnitedHealth Group in an attempt to block its $3.3 billion deal to take over Amedisys, a large home 'health company.
The suit was filed days after a meeting last weekend between the justice department and heads of both health care companies failed to quell concerns of possible antitrust issues, despite the companies' joint offer to sell off 100-plus clinics to a Texas-based competitor.
Antitrust regulators have been reviewing the proposed acquisition amid a federal inquiry into UnitedHealth's sprawling dominance across nearly every segment of health care. As one of the biggest U.S. companies overall, with $372 billion in revenue in 2023.
Civil Penalties
The United States also seeks civil penalties against Amedisys for falsely certifying compliance with its obligations under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act).
The complaint alleges that Amedisys violated the HSR Act because, at the time of its sworn certification, Amedisys failed to produce millions of documents or disclose the deletion of other documents.
For each day that Amedisys was in violation of the HSR Act, the United States seeks a monetary penalty of up to $51,744, as authorized by statute.
Amedisys: Home Health Care, Hospice, Palliative Care
Amedisys is a home health and hospice services provider, and a publicly traded Delaware corporation headquartered in Baton Rouge, Louisiana. In 2023, Amedisys nurses and other healthcare professionals made 10.6 million visits to patients in 37 states and the District of Columbia, earning the company $2.2 billion in revenue.
Amedisys’s former CEO and current Board Chairman, has acknowledged that the “pure competition” between UnitedHealth and Amedisys helps them “keep each other honest” and “drive better and better quality” to the benefit of their patients.
Amedisys' stock value dropped following news of the upcoming suit. A UnitedHealth spokesperson gave this statement:
"The Amedisys combination with [subsidiary company] Optum would be pro-competitive and further innovation, leading to improved patient outcomes and greater access to quality care. We will vigorously defend against the DOJ's overreaching interpretation of the antitrust laws."
UnitedHealth Group Inc.
UnitedHealth is a publicly traded Delaware corporation headquartered in Minnetonka, Minnesota. UnitedHealth is a vertically integrated insurer, healthcare provider, pharmacy benefit manager, and healthcare software and services vendor that brought in $372 billion in revenue in 2023.
UnitedHealth Has Proposed To Divest Certain Facilities
To address some of the overlaps between UnitedHealth and Amedisys, UnitedHealth has proposed to divest certain facilities to VitalCaring Group (VitalCaring).
But as the complaint alleges, the proposed divestiture does not alleviate harm in over 100 home health, hospice, and labor markets, which generate at least a billion dollars in revenue annually, serve at least 200,000 patients, and employ at least 4,000 nurses.
As further alleged in the complaint, VitalCaring has lower quality scores than either UnitedHealth or Amedisys and is beset by financial challenges, including a potential legal judgment approaching a half-billion dollars.
According to a Texas court, before becoming CEO of VitalCaring, its current CEO was running a competitor of VitalCaring while also running VitalCaring “from the shadows.”
Summary
#UnitedHealth, which runs the largest private health insurer in the U.S. and a sizable #physician #network, has been building out its provider capabilities, including by snapping up home health businesses as patients increasingly search out convenient, low-cost care in their homes and communities.
Demand for at-home care is expected to continue growing as the U.S. population ages. And reimbursement for the services remains high in programs like MA, where the government contracts with private insurers to administer the care of Medicare seniors.
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They are an enigma. They have always seemed to be a good company for their patients (the AARP product is loved by patients, for example), and a horrible company to providers. That strategy forces providers to participate, but providers assume the cost of the discounts, and possibly the cost of extra diligence in payment processing. I hate when DOJ oversteps, but I hope they win this one.