UnitedHealth Group and Amedisys outlined plans to divest a significant number of home health and hospice locations as they seek to close their $3.3 billion merger.
In a court filing issued late last week, UHG said it intends to pursue a divestiture plan that would sell off "at minimum" 128 combined home health and hospice facilities. The company said in the filing that once the divestitures are completed, it will operate only 10% of home health services in the U.S. and 4% of hospice services.
UnitedHealth argued that leaves plenty of competition in this space, as it will still be up against 11,000 home health agencies and more than 5,000 hospice agencies across the U.S.
The Department of Justice sued to block the deal in mid-November, arguing it would hamper competition across multiple home health markets.
In the filing, UnitedHealth counters that the government's assertion that competition will be lessened in "hundreds" of markets is possible only by "ignoring the proposed divestiture package entirely." The feds are also likely using extremely narrow definitions of markets as well as new enforcement guidelines that were not established at the time the deal was announced, the company said.
UHG argues that the deal will allow it to fill in gaps across the continuum of care as well as advance value-based care models, which is a focus at its Optum unit.
"If successful, this lawsuit would deprive patients, nurses, providers, and the overall healthcare system of these significant benefits," UnitedHealth said in the filing. "Worse, it would do so based on flawed economic theory, artificially narrow geographic markets, out-of-context quotations from a handful of documents, and with zero regard for the actual improvements to patient satisfaction and quality of care that would flow from the transaction."
The company also said that the government is discounting data that show "dozens of real-world examples" where deals that led to a similar level of consolidation as this one have increased quality and patient satisfaction.
The filing also argues that competition in the home health space is impacted by state and local regulations as well as federally mandated reimbursement rates.
"If the Government’s theories were true, the result would be exactly the opposite," UnitedHealth said. "But those theories do not reflect actual market realities, which show that competition in home health and hospice occurs across metropolitan areas at referral sources and in regional negotiations with Medicare Advantage payers."
Last month, UnitedHealth asked the court to dismiss the case as the federal government did not clearly outline in which markets it would be anticompetitive. The company has since withdrawn that motion.