U.S. Regulators Seek to Block UnitedHealths $3.3 Billion Purchase of Home Care Company

The Justice Department and four Democratic state attorneys general on Tuesday filed an antitrust lawsuit against the giant UnitedHealth Group in an attempt to block its $3.3 billion deal to take over Amedisys, a large home health company.

“Unless this $3.3 billion transaction is stopped, UnitedHealth Group will further extend its grip to home health and hospice care, threatening seniors, their families and nurses,” Jonathan Kanter, the assistant attorney general who heads the department’s antitrust division, said in a statement on Tuesday.

Antitrust regulators have been reviewing the proposed acquisition amid a federal inquiry into UnitedHealth’s sprawling dominance across nearly every segment of health care. As one of the biggest U.S. companies overall, with $372 billion in revenue in 2023, UnitedHealth’s operations include the nation’s largest health insurer and its Optum subsidiary, which oversees some 90,000 physicians, clinics and is a large pharmacy benefit manager. Last year, United bought one of the nation’s largest home health outfits, LHC Group.

The company had come under broader scrutiny this year when the Justice Department began an antitrust investigation as part of the Biden administration’s crackdown on what it considered to be anti-competitive behavior among corporate behemoths like Apple and Google.

Filed in federal court in Maryland just one week after the presidential election, the lawsuit was joined by the Democratic attorneys general from Maryland, Illinois, New Jersey and New York.

UnitedHealth Group argued that its merger would give consumers more choices. “The Amedisys combination with Optum would be pro-competitive and further innovation, leading to improved patient outcomes and greater access to quality care,” Optum said in a statement. “We will vigorously defend against the D.O.J.’s overreaching interpretation of the antitrust laws.”

It was unclear whether the lawsuit would survive the incoming administration of President-election Donald J. Trump and its expected replacement of top Justice officials. A spokeswoman for the Trump team did not respond to requests for comment.

But David Balto, a former antitrust official and lawyer in Washington, said he expected that the Trump administration would likely continue to pursue the lawsuit, calling it relatively straightforward and “a mainstream antitrust case.” In addition, he said that participation by the four states would also make it more difficult for the administration to drop or settle the case.

The Biden administration, especially with the Federal Trade Commission under the leadership of Lina Khan, has been aggressive in reviewing and challenging mergers and consolidation among health care companies.

During Mr. Trump’s first term, the Justice Department proved lenient with combinations that represented a foray into related businesses, known as vertical mergers. Two of the nation’s largest insurers, Aetna and Cigna, were allowed to combine with the largest pharmacy benefit managers, CVS Health and Express Scripts, to create new behemoths that oversee both health and drug plans.

UnitedHealth has come under fierce criticism in Congress by both Democratic and Republican lawmakers, many of whom have expressed concern over the company’s increasing clout.

Regulators say the combination of the home health powerhouses will hurt patients and the nurses who work for these companies. “UnitedHealth and Amedisys are direct competitors,” the lawsuit said. The combined entities would control 30 percent or more of either home health or hospice services in eight states.

“We are challenging this merger because home health and hospice patients and their families experiencing some of the most difficult moments of their lives deserve affordable, high quality care options,” the U.S. attorney general, Merrick B. Garland, said in a statement. “The Justice Department will not hesitate to check unlawful consolidation and monopolization in the health care market that threatens to harm vulnerable patients, their families, and health care workers.”

To appease concerns, UnitedHealth had proposed to sell some facilities to another company, VitalCaring Group. But regulators said the sale would not address the anticompetitive harm in over 100 markets and said that VitalCaring faced both financial and quality challenges. VitalCaring did not immediately respond to a request for comment.

The lawsuit represents the Justice Department’s second attempt to a prevent United acquisition that it deemed anticompetitive. The agency was unsuccessful in blocking United’s takeover of Change Healthcare, the technology company that later became the subject of a widespread cyberattack that brought much of the nation’s health care payment system to a halt.

United is still dealing with the fallout from how it managed the response to the cyberattack, with private information and data from an estimated 100 million customers compromised.