UnitedHealth rebuts Justice Department allegations in $3.3B Amedisys deal

UnitedHealth Group says the Justice Department’s antitrust challenge to its proposed $3.3 billion purchase of Amedisys is wrong on the merits and threatens to deprive consumers of benefits from sharper competition in the hospice and home care market.

The acquisition would boost efficiency while expanding services offered by its existing hospice and home care business, the two companies argue in a court filing submitted Friday in the U.S. District Court of Maryland.

The merger would lead to better care coordination, thereby reducing costly readmissions to the hospital, the companies say. They also contend that Amedisys workers would enjoy competitive health and retirement benefits at UnitedHealth Group.

In November, the Justice Department, along with attorneys general in Illinois, Maryland, New Jersey and New York, sued to block the merger, arguing the acquisition would harm patients and labor markets by significantly reducing competition. The companies are two of the largest home health and hospice providers in the U.S.

But in a court filing Friday, Eden Prairie-based UnitedHealth Group and Amedisys argued the government — in alleging the transaction would be presumptively unlawful in hundreds of local markets — was ignoring a proposed divestiture package. The Justice Department was using unrealistic market definitions, the companies said, while relying on “arbitrary, newly promulgated enforcement guidelines” that hadn’t even been proposed when the transaction was signed.

“The purported ‘evidence’ the government stitches together in its complaint is deeply misleading,” the companies said in the Friday filing, which was a response to the original November complaint. “Many of the government’s cherry-picked quotes relate to locations that will be addressed by a divestiture. Worse, the government mischaracterizes what it cites. ... Selectively excerpted documents do not constitute evidence, let alone facts.”

Judge James Bredar is expected to soon set a scheduling conference for the case, which marks the second time since 2022 the federal government has tried stopping UnitedHealth Group from completing a merger in its fast-growing Optum division for health care services.

Last week, the companies withdrew their motion to dismiss the antitrust complaint after the Justice Department filed with the court a list of 381 service areas where the government alleges presumptively anticompetitive impacts from the acquisition. None of the service areas are in Minnesota.

In June 2023, Optum announced it was offering about $3.26 billion to acquire Louisiana-based Amedisys Inc.

Optum entered the home care and hospice business in 2022 with a $5.4 billion acquisition of LHC Group, another Louisiana-based health care provider.

UnitedHealth Group (UHG) would operate just 10% of total home health services and 4% of hospice services across the U.S. after the Amedisys merger and a planned divestiture of a combined 128 home health and hospice facilities, the companies argued in their filing Friday.

“UHG will continue to compete with over 11,000 home health agencies and over 5,000 hospice agencies across the country,” the companies said.

The Justice Department’s complaint in November echoed questions from some in Congress last year about whether UnitedHealth Group has gotten too big, particularly as it provides more care directly to patients. UnitedHealth Group and Amedisys denied those allegations in their response filing Friday.

In 2022, the government unsuccessfully sued to block Optum’s $13 billion acquisition of Change Healthcare, a Tennessee-based health care data company.

Optum runs medical centers, sells IT and data consulting services and operates a unit for pharmacy benefits management. The division is distinct from UnitedHealth Group’s legacy health insurance business UnitedHealthcare, which is the nation’s largest insurer.

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