In the latest effort to prevent vertical consolidation in the healthcare industry, the U.S. Department of Justice (DOJ) – along with the states of Maryland, Illinois, New Jersey and New York – filed a lawsuit on Nov. 12 challenging the proposed merger between UnitedHealth Group (UHG) and Amedisys. In addition to alleging that the merger would violate Section 7 of the Clayton Act, the complaint also alleges that Amedisys violated the Hart-Scott-Rodino (HSR) Act by making an inaccurate certification, failing to disclose emails, and failing to produce hard copy documents and text messages from several custodians. The DOJ is seeking civil penalties for the HSR violations, which could amount to $10,000 per day of noncompliance.
UHG has been strategically expanding in the home health and hospice services market. With Amedisys, United would further expand its reach in the home health and hospice market. Amedisys is one of the nation's largest home health and hospice service providers, with nearly 500 locations across 32 states.
Given the size and scope of the proposed merger, the DOJ and the state plaintiffs allege that the merger would stifle competition by consolidating a substantial portion of the home health and hospice services market under UHG's control. Specifically, they contend that the merger would give UHG market shares of 30 percent or more in eight states, which makes the transaction presumptively anticompetitive under the current Merger Guidelines.
Central to the plaintiffs' challenge is the assertion that the merger would not only eliminate significant competition between two of the largest providers in the sector, but also fail to produce verifiable, merger-specific efficiencies capable of offsetting the anticompetitive effects likely to arise. Furthermore, the plaintiffs allege that the merger has the potential to adversely affect skilled nurses, who are key providers of home health and hospice services. By eliminating a major competitor in the employment market for these providers, the plaintiffs allege that the merger could stagnate or lower wages and adversely affect employment conditions, impacting hundreds of labor markets across the country.
According to the plaintiffs, the merger would also increase costs for elderly patients reliant on health and hospice care, bringing to the fore the broader issue of healthcare affordability and access. The lawsuit thus touches on the consolidation trends within the healthcare industry and their implications for competition, quality of care and consumer welfare.
