UnitedHealth and Amedisys Take Merger Talks with DOJ to Mediation Table

The Department of Justice (DOJ) is set to enter mediation with UnitedHealth Group and Amedisys on April 18, as part of its ongoing legal efforts to block the companies’ proposed $3.3B merger. This step comes amid an antitrust lawsuit initiated by the DOJ on November 12, under the Biden administration, which claims the deal could significantly reduce competition in the home health and hospice care sectors.

The scheduled mediation, confirmed by Magistrate Judge Susan Gauvey, is a response to mounting legal tension between the government and the two companies. In the meantime, Amedisys has successfully secured a temporary stay on one count of the lawsuit as of April 7. This allegation involves the government’s assertion that Amedisys did not fulfill the document and information submission obligations required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

In response to these regulatory issues, UnitedHealth Group (UHG) and Amedisys have proposed a divestiture strategy. In court filings, UHG stated it would sell off at least 128 combined home health and hospice care locations across the country. The company argues that once these divestitures are complete, it will operate only 10% of the home health and 4% of the hospice services in the U.S. This, they contend, still allows for significant market competition, pointing to the existence of more than 11,000 home health agencies and over 5,000 hospice providers nationwide.

The DOJ’s lawsuit aims to prevent the merger, arguing it would harm competition in multiple geographic areas. However, UHG counters that these claims are exaggerated and based on flawed analysis. The company says the DOJ has ignored the proposed divestitures, relied on overly narrow definitions of geographic markets, and applied recently updated antitrust enforcement guidelines that weren’t in place when the merger was first proposed.

UnitedHealth maintains that the proposed merger would advance the shift toward value-based care and help close existing gaps in patient services through its Optum division. The company contends that halting the transaction would deny patients, healthcare providers, and the overall system the opportunity to benefit from improved care quality and greater satisfaction. UnitedHealth has also taken issue with the DOJ’s lawsuit, claiming it is based on cherry-picked document excerpts, hypothetical economic theories, and a misrepresentation of how the home health industry actually operates.

To bolster its argument, the company highlighted previous healthcare mergers of comparable scale that, in its view, have delivered improved patient satisfaction and outcomes. UnitedHealth further asserted that the home health market is already shaped by a web of federal, state, and local rules, as well as consistent Medicare reimbursement policies. These existing frameworks, the company argued, help preserve market competition regardless of who owns the facilities.

Previously, UnitedHealth sought to have the DOJ’s case dismissed, arguing the government had failed to clearly identify the specific markets that would be negatively impacted by the merger. However, that motion was later withdrawn, and the company is now preparing for mediation in an effort to resolve the conflict.