UnitedHealth, Amedisys ask judge to toss antitrust lawsuit

UnitedHealth Group and Amedisys asked a federal judge Wednesday to either dismiss a government lawsuit over their planned merger or require the Justice Department to better define where the deal would stifle competition.

The motion is the latest chapter in UnitedHealth Group’s 18-month effort to acquire home health and hospice company Amedisys for $3 billion. In November, the Justice Department filed a lawsuit to block the deal, claiming it would stifle competition.

Related: Why UnitedHealth, Amedisys are standing behind their deal

In a motion filed in the U.S. District Court of Maryland, UnitedHealth Group and Amedisys told Judge James Bredar the government lawsuit allegedly violates a core requirement of any antitrust case. They allege the government failed to define which specific geographic regions would be severely impacted by UnitedHealth Group’s acquisition of Amedisys.

“Failure to allege where competition will be affected, or identify principles for determining where competition occurs, is a fundamental deficiency that requires dismissal of Count I,” the companies stated in the filing.

UnitedHealth Group operates in 37 states through its LHC Group home health and hospice subsidiary. Amedisys operates in 40 states. However, the companies said in the filing they account for only 12% of home health visits and 5% of hospice visits nationwide.

The request for a dismissal came days after UnitedHealth Group and Amedisys backed away from a deal to sell some home health and hospice locations to Dallas-based Vital Caring Group to alleviate antitrust concerns.

That transaction unraveled after a Delaware judge ordered Vital Caring Group last month to pay more than 40% of future profits to Encompass Health after it sued Vital Caring Group executives for poaching staff while they were still working at Encompass.

UnitedHealth Group and Amedisys would not comment on whether they are still seeking to sell locations in light of their motion to dismiss the federal lawsuit.

However, the Justice Department said in a letter to Bredar last week that the companies are still planning to find buyers for some Amedisys locations. The DOJ said the uncertainty around a divestiture buyer means the government needs longer to prepare its antitrust case than UnitedHealth Group and Amedisys want.

In a note to investors, Stephens healthcare analyst Scott Fidel said the deal could eventually go through if the regulatory environment improves under the incoming Trump administration. He also said Amedisys would likely need to sell some locations or come up with another remedy to ease antitrust concerns.

UnitedHealth Group inked the all-cash deal to buy Amedisys in June 2023, after the Baton Rouge, Louisiana, home care provider spurned an earlier $3.6 billion all-stock deal with infusion company Option Care Health.

Last month, the UnitedHealth Group and Amedisys agreed to extend the closing of the deal until the end of this year or 10 days after the closing of the government’s court challenge of the acquisition.