Regulators reviewing UnitedHealth's $3.7B Amedisys acquisition

Photo: Bloom Productions/Getty Images

Regulators in Oregon are investigating a pending deal that would see UnitedHealth Group's Optum subsidiary acquire home health provider Amedisys for an estimated $3.7 billion.

Regulators, in a Securities and Exchange Commission filing, said the deal is subject to "approval from the Oregon Health Authority (OHA) in connection with the Health Care Market Oversight Program Notice of Material Change filed with respect to the proposed acquisition."

In addition, Seeking Alpha and The Wall Street Journal have reported that the U.S. Department of Justice is considering a lawsuit to block the impending acquisition. 

According to Seeking Alpha, the DOJ requested more information from Amedisys about the UHG deal in August, and two months later, the potential transaction caught the attention of Sen. Elizabeth Warren (D-Mass.) and Rep. Pramila Jayapal (D-Wash.), who asked antitrust regulators to scrutinize the deal.

The deal was announced last June. The agreement calls for the acquisition of Amedisys's outstanding common stock in an all-cash transaction for $101 per share.

WHAT'S THE IMPACT?

The Wall Street Journal reported that the DOJ is looking into ties between UHG and its Optum subsidiary, investigating any potential impacts of the company's doctor-group acquisitions on both business rivals and consumers.

In-home care is provided by thousands of organizations nationwide, with no single participant having more than a single-digit percentage share. Optum cited that as a reason it's confident it can secure approval for the combination.

"Even with the numerous providers, demand for in-home care far exceeds available supply, creating the need for substantial investment in the sector to more fully serve patients and their families with compassionate, high quality care in the comfort of their own homes," the company wrote when the deal was announced.

If the deal goes through, Amedisys will be folded into Optum. Last year, UHG outbid Option Care Health; Amedisys had entered into a merger agreement with Option in May 2023, but a month later the two companies entered into a termination agreement, effective upon receipt of a $106 million termination fee payable within 24 hours of the execution of the agreement.

The OHA offered a preliminary report last week saying the deal, if it goes through, could accelerate the consolidation of the home health market, and could have anticompetitive effects as part of a vertical integration.

The transaction, said OHA, would "increase concentration in Oregon's market for home health and hospice services, and further vertical consolidation of a large health insurer with a provider organization may increase the risk of anticompetitive effects."

THE LARGER TREND

When the deal was first proposed, Dr. Patrick Conway, CEO of Optum Care Solutions, said, "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."

One of Optum's most notable recent deals involved its merger with Change Healthcare. The Department of Justice and the states of Minnesota and New York had brought a lawsuit to stop the $13.8 billion merger, but dropped their appeal in March.

Optum and Change officially merged in October 2022, after winning their case in federal court in September of that year. Judge Carl Nichols had rejected the DOJ's argument that UnitedHealthcare, UHG's insurance arm and the nation's largest insurer, would use payers' sensitive claims data provided by Change to competitive advantage.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.