Amedisys Plunges As Justice Department Sues To Halt $3.3B Sale To UnitedHealth

A federal judge has halted a $3.3 billion acquisition of hospice and home health provider Amedisys by UnitedHealth Group after a Justice Department lawsuit seeking to block the deal, arguing it would harm competition and lead to higher prices in the market.

The Justice Department's lawsuit, filed in U.S. District Court in Washington, D.C., alleges that the acquisition would give UnitedHealth "monopoly power" in the market for home health services and hospice care in the United States, leading to higher prices for patients and lower-quality services.

According to the lawsuit, UnitedHealth is already the largest provider of home health services in the United States, and the acquisition of Amedisys would give it a market share of over 40%, making it by far the dominant player in the industry.

The Justice Department also alleges that the deal would harm competition in the market for hospice care, where UnitedHealth is already one of the largest providers.

The acquisition would give UnitedHealth a market share of over 25% in the hospice care market, making it the second-largest provider in the industry, according to the lawsuit.

The Justice Department argues that the deal would create a "monopsony" in the market for hospice care, where UnitedHealth would be the dominant purchaser of hospice services, giving it the power to drive down prices and reduce the quality of care.

The lawsuit is seeking to block the acquisition and to prevent UnitedHealth from acquiring any of Amedisys's assets.

It is the latest in a series of antitrust lawsuits filed by the Justice Department to block mergers in the healthcare industry.

In 2021, the Justice Department sued to block a $2.2 billion merger between health insurers Aetna and Humana, and a $1.5 billion merger between hospitals St. Luke's Health System and Saltzer Health.

Both lawsuits were ultimately unsuccessful, but they signal the Justice Department's increased focus on antitrust enforcement in the healthcare industry.