UnitedHealth Acquires Amedisys in $3.3 Billion Deal After Long Regulatory Battle

UnitedHealth Group has closed its $3.3 billion acquisition of home health and hospice provider Amedisys after a two-year regulatory battle. The deal marks a significant expansion of UnitedHealth's home health capabilities and makes it a serious contender in the US home health and hospice market. UnitedHealth will fold Amedisys into its health services division Optum, which already owns LHC Group.

UnitedHealth Group has completed its $3.3 billion acquisition of home health and hospice provider Amedisys, marking a significant expansion of the company's home health capabilities and positioning it as a major player in the U.S. home health and hospice market. The acquisition, which was announced on Thursday, follows a two-year regulatory battle with the U.S. Department of Justice (DOJ) [1].

The DOJ initially sued to block the deal in November 2023, citing concerns that the merger would hinder access to home health and hospice services. However, UnitedHealth and Amedisys reached a settlement with the DOJ on Aug. 7, 2024, which required the companies to divest 164 home health and hospice locations in 19 states [2]. The divestiture impacts facilities with a combined annual revenue of $528 million and includes one palliative care facility [1].

The settlement also required Amedisys to pay a $1.1 million civil penalty for falsely certifying that it had provided accurate responses under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act. Additionally, the proposal obligates UnitedHealth to divest an additional eight locations if it fails to obtain regulatory approval for the initial divestiture and imposes a monitor to supervise UnitedHealth's compliance and provide the divestiture buyers with the necessary assets, personnel, and relationships to compete against UnitedHealth in the overlap areas [1].

UnitedHealth will fold Amedisys into its health services division Optum, which already owns LHC Group. The acquisition will help UnitedHealth's vertical integration strategy, where it benefits from the interplay between its UnitedHealthcare insurance arm and its healthcare delivery assets [3]. The merger is expected to make UnitedHealth the largest player in the U.S. home health and hospice market.

The deal has drawn criticism from some lawmakers who argue that the settlement fails to protect competition and could lead to higher costs and reduced access to home health and hospice care. However, UnitedHealth has stated that the merger will help it keep patients healthy and improve its home health capabilities [3].

References:
[1] https://financialregnews.com/justice-department-to-require-unitedhealth-group-divestitures-in-amedisys-acquisition/
[2] https://www.theadvocate.com/baton_rouge/news/business/33-billion-deal-for-baton-rouge-based-amedisys-completed/article_875b8089-3a1a-4d38-910e-90a861ef8268.html
[3] https://www.healthcaredive.com/news/unitedhealth-amedisys-deal-closes-doj/757742/