UnitedHealth to enter mediation with DOJ over Amedisys deal

 

• UnitedHealth and Amedisys are heading to mediation with the Department of Justice over the DOJ’s bid to block their $3.3 billion merger over anticompetitive concerns.
• Late last week, Judge Susan Gauvey of Maryland’s district court scheduled August 18 for a mediation conference, wherein UnitedHealth, Amedisys and antitrust regulators will have a magistrate judge’s help in hashing out a solution to the DOJ’s opposition.
• The DOJ filed its lawsuit in November arguing UnitedHealth’s buy of Amedisys, one of the largest home health and hospice providers in the U.S., would raise prices for consumers in more than 20 states. Maryland, Illinois, New Jersey and New York also joined the DOJ’s complaint.

UnitedHealth’s health services division Optum first announced plans to buy Amedisys in summer 2023 after a bidding war over the Louisiana-based home health and hospice provider. Amedisys shareholders approved the deal later that year.

However, the merger has been held up by antitrust regulators, who say UnitedHealth’s ownership of LHC Group, a rival to Amedisys that UnitedHealth acquired for $5.4 billion in 2023, is cause for concern.

If the transaction goes through, Optum will control 30% or more of the home health or hospice markets in eight states, the DOJ said in its complaint. The deal will also add 500 care sites to Optum’s home health and hospice portfolio and extend its reach into five additional states, harming patients and providers by eliminating competition, according to the DOJ.

UnitedHealth and Amedisys, which deny that their merger would have anticompetitive effects, have offered plans to divest businesses to ameliorate the DOJ’s concerns.

Most recently, UnitedHealth and Amedisys offered to sell more than 120 home health and hospice facilities, according to a court filing in February. If the sales are approved, UnitedHealth would only operate 10% of home health and 4% of hospice services in the U.S.

Still, the offers have not proved sufficient for the DOJ, which has grown increasingly concerned about the size and influence of UnitedHealth — a company that operates one of the largest insurers in the nation, a major pharmacy benefit manager and a healthcare technology company, while employing thousands of physicians.

The DOJ is reportedly investigating the conglomerate for its potential anticompetitive effects, including the relationship between Optum and its insurer UnitedHealthcare. Meanwhile, the Federal Trade Commission is suing UnitedHealth’s PBM, Optum Rx, along with other PBMs for allegedly driving up the price of insulin.

https://www.healthcaredive.com/news/unitedhealth-amedisys-doj-mediation/745386/