Justice Department Moves to Block UnitedHealth's $3.3 Billion Acquisition of Amedisys, Citing Risks to Patient Care & Competition

The U.S. Department of Justice (DOJ), backed by state attorneys general from Maryland, Illinois, New Jersey, and New York, took a bold step today to halt UnitedHealth Group’s proposed $3.3 billion acquisition of home health and hospice provider Amedisys Inc. The lawsuit, filed in the District of Maryland, argues that the merger could lead to fewer choices, higher costs, and potentially lower standards of care for some of the nation’s most vulnerable patients and overburdened nurses.

In plain terms, the DOJ believes that patients and families facing challenging times — whether coping with chronic illnesses at home or seeking comfort in hospice care — deserve competitive healthcare options that keep prices in check and quality high. "Home health and hospice patients and their families, often facing some of the most challenging times of their lives, deserve affordable, high-quality care options," said Attorney General Merrick Garland. "We will not stand by as consolidation in the healthcare market risks harming vulnerable patients, their families, and the healthcare workers who serve them.”

Why the DOJ Is Pushing Back

UnitedHealth and Amedisys have been head-to-head competitors in the home health and hospice market, and that rivalry, DOJ officials argue, is crucial for keeping each company sharp on pricing, quality, and service. UnitedHealth’s acquisition of Amedisys, they say, would be a game-changer, concentrating power in the hands of a single giant, and potentially leaving patients with fewer options and higher costs.

“American healthcare is unwell,” said Jonathan Kanter, Assistant Attorney General for the DOJ’s Antitrust Division. “Unless this transaction is stopped, UnitedHealth will further extend its reach, squeezing resources that patients and caregivers depend on.”

To ease concerns about overlapping services, UnitedHealth has offered to sell off certain Amedisys facilities to a third party, VitalCaring Group. But DOJ officials aren’t convinced this will do the trick. According to the complaint, the proposed sale would only scratch the surface, leaving hundreds of local markets unprotected from the potential fallout of a UnitedHealth-Amedisys merger. The complaint also points to some unsettling issues with VitalCaring, from financial troubles to low-quality ratings, that could leave the communities they’re meant to serve high and dry.

And then there’s this: VitalCaring’s CEO has been accused of some eyebrow-raising behavior, including allegedly managing a competitor “from the shadows” while at VitalCaring — a point the DOJ clearly isn’t taking lightly.

Beyond the antitrust issues, the DOJ is also taking Amedisys to task for failing to comply with key regulatory obligations. According to the DOJ, Amedisys allegedly didn’t produce millions of documents when it certified its compliance under the Hart-Scott-Rodino (HSR) Act — a crucial law in merger cases. For every day it’s found in violation, Amedisys could face penalties of up to $51,744.

UnitedHealth already holds a sweeping presence in insurance, pharmacy benefits, and health technology. With 2023 revenues topping $372 billion, UnitedHealth’s reach across the healthcare landscape is hard to overstate. But Amedisys, a Louisiana-based leader in home health and hospice, has carved its own niche, providing over 10 million home visits in 2023. Together, they would form a powerful — and possibly overpowering — force in the home health and hospice sector.

By challenging this deal, the DOJ is putting its foot down on what it sees as runaway consolidation in healthcare, emphasizing the need to protect patients, families, and workers alike. The case will no doubt shape the future of competition in healthcare, and it could well set the stage for how the government approaches other mega-mergers in essential industries.

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