Dive Brief:
- The Department of Justice is requesting more data from Amedisys regarding its proposed $3.3 billion acquisition by UnitedHealth, a move that will push back the timeline of the deal.
- The home health and hospice provider disclosed in a filing with the SEC on Thursday that it received a second request for information from regulators on August 4 regarding the merger.
- UnitedHealth announced plans to acquire Amedisys in June, after the Louisiana-based provider reneged on an existing merger agreement with Option Care Health.
Dive Insight:
Over the summer, Amedisys agreed to be acquired by UnitedHealth’s health services segment Optum for $101 a share in cash, ending its previous agreement with Option Care.
UnitedHealth has been snapping up home health businesses in a bid to capture revenue by delivering care in increasingly popular home and community locations, while curbing health benefits spending by prodding its beneficiaries toward the low-cost settings.
Analysts said the deal was likely to face antitrust scrutiny despite minimal geographic overlap between Amedisys and LHC Group, the home health business UnitedHealth acquired in February, due to regulators’ focus on other UnitedHealth buys.
The second request extends the waiting period before UnitedHealth and Amedisys can consummate the deal under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The companies can’t move forward until 30 days after they’ve substantially complied with the DOJ’s request.
Regulators have been increasingly active in health M&A oversight, after President Joe Biden in 2021 said he wanted more “vigorous” oversight of healthcare mergers.
The DOJ launched an antitrust probe into the managed care sector this summer that’s still in its early stages, according to a Capitol Forum report in July.
Major health insurers are also under a significant amount of scrutiny for tie-ups with pharmacy benefit managers, facing investigations by the Federal Trade Commission and other congressional committees.
However, the second request for more information doesn’t automatically mean a challenge or breakdown of the deal.
A number of recent healthcare deals have been hit by second requests but still gone through, including Amazon’s $3.9 billion acquisition of One Medical, CVS’ $8 billion acquisition of Signify and UnitedHealth’s $5.4 billion acquisition of LHC.
Regulators have historically struggled to make a case against complex and non-traditional tie-ups, which have proliferated in healthcare as hospitals look to expand across markets and insurers purchase provider groups, among other plays.
In July, the FTC and DOJ proposed updates to merger guidelines that could give them new ammunition in targeting such deals.
In good news for UnitedHealth’s M&A ambitions, United Kingdom regulators on Friday provisionally cleared UnitedHealth’s planned 1.2 billion pound ($1.6 billion) acquisition of health tech firm EMIS Group, after finding no competitive concerns.
