Yet
another
shoe
has
dropped
in
the
UnitedHealth
Group/Amedisys
saga.
Last
week,
the
Justice
Department
—
along
with
the
Attorneys
General
of
Maryland,
Illinois,
New
Jersey,
and
New
York
—
filed
a
lawsuit
to
block
UHG’s
$3.3
billion
acquisition
of
home
health
and
hospice
company
Amedisys
through
Optum.
In
2023,
UnitedHealth
Group’s
Optum
announced
that
it
plans
to
acquire
Amedisys,
beating
out
Option
Care
Health.
However,
the
healthcare
giant
has
faced
numerous
challenges
in
finalizing
the
deal,
with
the
DOJ
scrutinizing
the
merger.
Then
in
late
June,
UHG
and
Amedisys
announced
that
they
agreed
to
sell
certain
home
health
centers
to
VCG
Luna,
an
affiliate
of
VitalCaring
Group,
as
a
way
to
push
the
deal
through.
The
divestiture
didn’t
satisfy
the
DOJ.
The
DOJ’s
complaint
alleges
that
the
deal
would
remove
competition
between
UHG
and
Amedisys
due
to
UHG’s
previous
acquisition
of
home
health
and
hospice
company
LHC
Group.
However,
experts
are
unsure
what
the
outcome
of
this
lawsuit
will
be
particularly
under
the
incoming
Trump
administration,
which
may
have
a
different
M&A
policy
than
the
Biden
administration.
Some
believe
that
the
previous
Trump
administration
was
more
favorable
to
large
corporations,
likely
making
blocking
the
UHG/Amedisys
deal
less
of
a
priority,
compared
with
the
Biden
administration
that
has
favored
giving
power
back
to
clinicians.
But
even
aside
from
the
differences
in
governing
philosophy,
one
expert
noted
that
the
main
reason
for
antitrust
lawsuits
—
prices
would
rise
as
a
result
of
the
transaction,
hurting
consumers
and
patients
—
seems
to
be
missing
from
the
equation
here.
That’s
because
of
the
outsized
role
Medicare
and
Medicaid
play
in
the
home
health
industry.
Why
the
DOJ
is
Suing
According
to
the
DOJ’s
complaint,
“competition
between
UnitedHealth
and
Amedisys
benefits
millions
of
Americans
who
need
home
health
or
hospice
services.”
However,
that
competition
would
disappear
if
the
proposed
merger
between
Minnetonka,
Minnesota-based
UHG
and
Baton
Rouge,
Louisiana-based
Amedisys
went
through.
The
agency
alleged
that
the
merger
is
“presumptively
anticompetitive
and
illegal.”
The
complaint
also
stated
UHG’s
plan
to
acquire
Amedisys
was
part
of
“an
intentional,
sustained
strategy
of
acquiring,
rather
than
beating,
competition.”
In
2022,
the
healthcare
giant
recognized
that
home
healthcare
was
a
growing
space
and
went
on
to
buy
LHC
Group
in
2023
for
$5.4
billion.
Also
in
2023,
Amedisys
agreed
to
merge
with
infusion
provider
Option
Care.
However,
UHG
prevented
this
from
happening
by
offering
$3.3
billion
to
acquire
Amedisys,
as
well
as
paying
a
breakup
fee
to
Option
Care
for
ending
the
merger
with
Amedisys.
The
DOJ
added
that
UHG
and
Amedisys
are
aware
of
their
competition
and
how
it
benefits
patients.
“As
Amedisys’s
former
CEO
and
current
Board
Chairman
said,
the
‘pure
competition’
between
Amedisys
and
UnitedHealth
means
the
two
companies
‘keep
each
other
honest
and
we
keep
driving
better
and
better
quality.
And
who
benefits
from
it?
Our
patients,’”
the
complaint
stated.
“Today,
UnitedHealth
and
Amedisys
compete
vigorously
against
each
other
across
their
home
health
and
hospice
businesses.
Amedisys
celebrates
‘stealing
share’
from
UnitedHealth
and
develops
its
strategy
with
UnitedHealth
in
mind.
For
its
part,
UnitedHealth
has
aspired
to
‘put
a
dent
in
Amedisys.’”
By
acquiring
Amedisys,
UHG
would
grow
its
home
health
and
hospice
footprint
to
five
more
states,
as
well
as
receive
500
additional
locations
across
32
states
it
already
operates
in.
The
deal
would
also
give
UHG
control
of
at
least
30%
of
the
home
health
or
hospice
services
in
eight
states.
The
merger
could
also
negatively
affect
home
health
and
hospice
nurses,
as
UHG
and
Amedisys
are
currently
each
other’s
biggest
competitors
for
employing
nurses,
according
to
the
DOJ.
The
deal
would
take
away
competition
for
pay
and
leave
fewer
options
for
employment.
In
addition,
UHG
and
Amedisys’
proposed
divestiture
to
VitalCaring
is
not
enough
for
the
deal
to
go
through.
VitalCaring
will
not
make
up
for
the
competitive
strength
lost
in
the
merger,
as
the
company
has
only
operated
for
three
years,
the
DOJ
said.
“Even
if
VitalCaring
were
an
adequate
buyer,
the
divestiture
does
not
resolve
the
competitive
overlap
in
over
100
home
health
and
hospice
markets
across
19
states
and
the
District
of
Columbia,
accounting
for
well
in
excess
of
$1
billion
in
total
commerce,”
the
DOJ
said.
The
divestiture
also
fails
to
address
the
harm
caused
to
thousands
of
home
health
and
hospice
nurses
in
labor
markets
in
18
states,
the
DOJ
added.
Additionally,
it
forms
a
new
anticompetitive
and
illegal
overlap
in
the
Biloxi
and
Gulfport,
Mississippi
area.
There
are
also
larger
healthcare
implications
at
stake,
the
DOJ
argued.
If
UHG
successfully
acquires
Amedisys,
then
the
three
largest
home
health
providers
would
be
owned
by
the
two
largest
Medicare
Advantage
insurers.
UHG
would
have
both
LHC
and
Amedisys,
while
Humana
bought
Kindred
in
2021.
In
other
words,
it
would
make
UHG
even
more
dominant
than
it
already
is.
“This
merger
would
also
further
consolidate
UnitedHealth’s
standing
as
the
dominant
force
in
nearly
every
corner
of
the
American
healthcare
system,”
the
complaint
stated.
“Over
the
past
three
years,
UnitedHealth
has
spent
more
than
$36
billion
acquiring
companies
in
a
variety
of
healthcare
settings,
turning
itself
into
the
largest
commercial
health
insurer
in
the
United
States;
the
largest
employer
of
physicians;
the
second-largest
pharmacy
benefit
manager;
and
one
of
the
largest
healthcare
technology
and
service
vendors.”
Amedisys
and
UHG’s
Optum
subsidiary,
which
would
be
acquiring
the
home
health
company,
disagree
that
the
deal
is
anti-competitive
and
launched
a
website
addressing
the
DOJ’s
complaint.
On
the
website,
the
companies
argue
that
once
combined,
they
would
operate
only
a
“fraction”
of
home
health
and
hospice
markets
nationally,
and
that
the
merger
will
not
“adversely
impact
services”
in
the
U.S.
In
a
statement,
company
representatives
offered
similar
explanations.
“The
Amedisys
combination
with
Optum
would
be
pro-competitive
and
further
innovation,
leading
to
improved
patient
outcomes
and
greater
access
to
quality
care,”
an
Optum
representative
stated.
“We
will
vigorously
defend
against
the
DOJ’s
overreaching
interpretation
of
the
antitrust
laws.”
A
spokesperson
for
Amedisys
stated
that
it
remains
“committed
to
the
transaction,
which
we
believe
will
create
more
opportunities
to
deliver
quality,
compassionate
and
value-based
care
to
patients
and
their
families.”
Will
the
DOJ
succeed?
It’s
hard
to
say
for
sure
what
the
outcome
of
the
DOJ’s
lawsuit
will
be,
particularly
with
the
change
in
administration.
“That
presents,
I
think,
a
whole
other
set
of
questions
around,
‘how
much
will
the
future
FTC
leadership
and
DOJ
leadership
continue
to
make
this
a
priority
as
far
as
the
lawsuit
goes?’”
said
Tyler
Giesting,
director
of
healthcare
and
life
sciences
at
Chicago-based
West
Monroe.
“Or
will
that
change,
given
the
potential
for
a
more
dealmaking-friendly
administration
taking
office
again?”
Giesting’s
comments
were
echoed
by
Dr.
Adam
Brown,
an
emergency
physician
and
founder
of
healthcare
advisory
firm
ABIG
Health.
While
the
DOJ
under
the
Biden
administration
has
been
cracking
down
more
on
mergers
and
has
been
favoring
giving
power
back
to
clinicians
to
promote
competition,
the
previous
Trump
administration
seemed
to
favor
Medicare
Advantage
and
corporations.
Therefore,
he’s
not
sure
what
will
happen
with
this
DOJ
lawsuit
when
the
new
administration
takes
over.
Another
healthcare
expert
noted
that
this
is
an
interesting
case
because
the
federal
government
typically
blocks
proposed
mergers
on
the
grounds
that
the
combined
company
could
raise
prices
for
consumers.
The
UHG/Amedisys
deal,
however,
is
different.
Given
that
Medicare
and
Medicaid
pay
for
75%
of
expenses
tied
to
the
home
health
industry
and
only
25%
is
paid
by
commercial
insurers,
the
government
is
actually
the
“price
setter”
for
home
health
services,
said
Hal
Andrews,
president
and
CEO
of
Trilliant
Health,
a
healthcare
analytics
company.
“As
a
result,
the
underlying
rationale
of
the
complaint
isn’t
really
on
price
because
an
individual
Medicare
Advantage
beneficiary
is
not
really
impacted
by
the
‘transfer
pricing’
between
two
UnitedHealth
subsidiaries,”
Andrews
said.
“Instead,
the
complaint
emphasizes
the
potential
impact
on
quality
of
service
and
competitive
compensation
for
home
health
aides
and
nurses
if
the
merger
was
consummated,
and
it
will
be
interesting
to
see
if
the
judge
believes
that
is
enough
to
block
the
merger.”
Even
if
this
merger
with
Amedisys
doesn’t
go
through,
Brown
believes
that
UnitedHealth
has
built
a
company
that
is
“too
big
to
fail.”
“There
are
not
a
lot
of
tentacles
that
UnitedHealth
does
not
have
into
our
entire
healthcare
system,”
he
said.
“That
should
give
all
of
us
a
bit
of
concern
when
a
corporation,
singular
entity,
has
that
much
market
share,
but
not
just
in
one
singular
sector,
in
multiple
different
sectors.
It
gives
them
a
lot
of
power,
and
that
gives
the
people
that
they’re
trying
to
serve
not
a
lot
of
control
or
power.”
Photo:
Kritchanut,
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