Dive Brief:
UnitedHealth and home health provider Amedisys have agreed to push back the closure date of their $3.3 billion merger, according to a securities filing last month.
The delay comes after the Department of Justice and three states sued to block the deal late last year, arguing it would give UnitedHealth too much control of the home health and hospice market.
The new waiver agreement extends the deadline to merge to the tenth day after a U.S. district court decides that lawsuit, or Dec. 31, 2025 — whichever is earlier. Previously, the companies had expected to merge by the end of 2024.
Dive Insight:
Amedisys agreed to be acquired by UnitedHealth in June 2023, after the Minnesota-based healthcare giant outbid a preexisting deal with Option Care Health. However, regulators in the Biden administration closely scrutinized the deal before ultimately suing to block it in November.
UnitedHealth already owns LHC Group, a rival to Amedisys that UnitedHealth acquired for $5.4 billion in 2023. LHC and Amedisys are two of the biggest home health companies in the country. Combining them under one roof would harm patients and providers by eliminating competition, according to the DOJ.
UnitedHealth and Amedisys deny that their merger would have anticompetitive effects.
However, regulators have grown increasingly concerned about the size and influence of UnitedHealth, a company that operates one of the largest insurers in the nation, a major pharmacy benefit manager and a healthcare technology company, while employing thousands of physicians.
The DOJ is reportedly investigating the conglomerate for its potential anticompetitive effects, including the relationship between insurer UnitedHealthcare and health services division Optum. Meanwhile, the Federal Trade Commission is suing UnitedHealth’s PBM, Optum Rx, along with other PBMs for allegedly driving up the price of insulin.
It’s unclear if regulators under President-elect Donald Trump, who assumes office later this month, will continue the antitrust crusade against UnitedHealth. Trump’s antitrust regime is generally expected to be friendlier to consolidation than the Biden administration.
Efforts by the DOJ to block previous UnitedHealth buys have failed in the past. Regulators sued to stop UnitedHealth’s acquisition of healthcare technology firm Change Healthcare in 2022, but a judge allowed the deal to go through.
The amendment to UnitedHealth and Amedisys’ merger agreement also increases the fee if their merger fails for regulatory reasons to $275 million. It could rise up to $325 million if UnitedHealth fails to divest the assets needed to close the deal by May 1.
