UnitedHealth Group’s planned purchase of home health company Amedisys for $3.3 billion is in jeopardy. The U.S. Department of Justice reportedly is suing to block the transaction, as are the attorneys generals of Maryland, New Jersey and New York.

The lawsuit comes amid concerns about reduced competition in the home health market. The department believes the deal would “harm competition in the market for home health services,” sources told Bloomberg.

The move follows a recent meeting between the companies' executives and the Justice Department aimed at addressing these concerns, according to Bloomberg. To mitigate antitrust issues, Amedisys proposed selling more than 100 locations to a private operator in Texas, contingent upon the deal's completion. "These remedies do not seem sufficient to satisfy the hardline Biden DOJ,” Stephens analyst Scott Fidel said. “Clearly, we'll look to see whether a Trump DOJ decides to pursue or drop this case in 2025.”

Optum, a subsidiary of UnitedHealth Group, acquired LHC Group for $54 billion in February 2023. If Optum and Amedisys were to combine under one umbrella, UnitedHealth Group and Optum would own close to 10% of the home health market. The overlap in markets where both companies operate concerns regulators.

“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 said.

Optum first announced plans to merge with Amedisys in June 2023. The Baton Rouge, La.-based company, founded in 1982, provides home health, hospice and high-acuity care services across more than 500 care centers in 37 states and the District of Columbia.

Read more: Cigna Group officially shoots down rumors of potential merger with Humana

"Amedisys' commitment to quality and care innovation within the home and the patient-first culture of its people, combined with Optum's deep value-based care expertise, can drive meaningful improvement in the health outcomes and experiences of more patients at lower costs, leading to continued growth," Dr. Patrick Conway, CEO of Optum Rx, said at the time.

Amedisys shareholders approved the acquisition in September 2023. "There can be no assurance that the merger will not be challenged on antitrust grounds or, if such a challenge is made, that the challenge will not be successful," Amedisys wrote in an SEC filing at the time.

The proposed merger has been under an antitrust review by the Justice Department since August 2023. Last March, Oregon regulators opened their own review after a preliminary report found the deal could hurt competition in the state's home health markets.

Separately, the Justice Department launched an antitrust investigation into UnitedHealth Group in February 2024, probing the company's relationship between its insurance unit, UnitedHealthcare, and Optum.

Instant Insights /

DOJ sues to block UnitedHealth Group’s acquisition of Amedisys

More From HR Executive

Related Stories

Recommended For You