UnitedHealth pushing back against DOJ lawsuit challenging $3.3B Amedisys deal

UnitedHealth Group is asking a judge to toss the federal government’s primary argument in its challenge to the Eden Prairie-based company’s proposed $3.3 billion acquisition of Amedisys, a home care and hospice company headquartered in Louisiana.

When the Justice Department sued in November to block the deal, the complaint alleged harm to competition in local health care markets across the country, but did not specify the exact geographic boundaries of the markets at issue, according to a motion to dismiss filed this month by both companies.

UnitedHealth says its Optum health services division and Amedisys operate in 37 and 40 states, respectively, but together account for just 12% of home health visits and 5% of hospice visits nationwide.

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

“Plaintiffs' complaint violates a core pleading requirement of any antitrust case: it fails to allege clearly defined relevant geographic areas where plaintiffs contend competition will be substantially lessened ...,” UnitedHealth Group said in the motion to dismiss. “Failure to allege where competition will be affected, or identify principles for determining where competition occurs, is a fundamental deficiency that requires dismissal.”

The companies asked the judge hearing the case to either dismiss the first count in the lawsuit or require plaintiffs to amend their complaint. On Tuesday, Judge James Bredar directed plaintiffs to file their opposition to the motion to dismiss on or before Jan. 29.

The November complaint marked the second time in less than three years that the Justice Department tried stopping UnitedHealth Group from completing a merger in its fast-growing Optum division for health care services. Optum is distinct from UnitedHealthcare, the company’s legacy health insurance business that’s the largest carrier in the U.S.

The government lost its bid in 2022 to block Optum’s purchase of Change Healthcare, a Tennessee-based company that processed health care data. In that case, UnitedHealth Group did not file a motion to dismiss.

In the Amedisys merger, the companies have proposed selling some assets to maintain and even enhance competition in certain markets, but that effort has been hampered, they say, by the lack of “specific, cognizable markets that allegedly would suffer antitrust harm.”

“The parties therefore cannot determine what competitors operate in or around those markets, ascertain the degree to which entry has occurred, or — critically — calculate market shares," the motion asserts. “These are key questions in any antitrust case, will be the focus of very substantial fact and expert discovery, and are necessary for a final divestiture plan.”

UnitedHealth Group said it’s unusual to file a motion to dismiss in a merger challenge brought by antitrust regulators, according to its Jan. 8 filing in the U.S. District Court of Maryland. But the government’s complaint over the Amedisys merger is unusual, the company maintains, because geographic details have been a common feature in 155 antitrust cases brought by the government since 1992.

“UHG and Amedisys do not file this motion lightly ...,” the companies said in the filing. “In a stark departure from 30 years of settled practice, plaintiffs fail to adequately allege the ‘local’ geographic markets that supposedly will experience a substantial lessening of competition.”

The lawsuit in November from the Justice Department and attorneys general echoes questions from some in Congress last year about whether UnitedHealth Group has gotten too big, particularly as it provides more care directly to patients.

The first count in the Justice Department’s lawsuit alleged the Amedisys merger might substantially lessen competition for home health services and hospice services in hundreds of local markets, thereby rendering the acquisition “presumptively unlawful.” The complaint includes just one other count, in which the government says the Louisiana company did not comply with certain requirements to provide information about the merger to regulators.

“Over the past three years, UnitedHealth ... [turned] itself into the largest commercial health insurer in the United States; the largest employer of physicians; the second-largest pharmacy benefit manager; and one of the largest health care technology and service vendors,” plaintiffs said in their complaint.