A U.S. Justice Department (DOJ) victory in its lawsuit to block UnitedHealth Group’s (NYSE: UNH) acquisition of Amedisys (Nasdaq: AMED) is unlikely to have a cooling effect on hospice M&A, according to some experts.

The UnitedHealth Group subsidiary Optum in June 2023 agreed to acquire Amedisys in a $3.3 billion deal. Optum in February 2023 also acquired the home health and hospice provider LHC Group for $5.4 billion. DOJ in December 2024 filed the lawsuit to kill the deal. The state attorneys general of Maryland, Illinois, New Jersey, and New York are also plaintiffs in the suit.

But even if DOJ succeeds in blocking the deal, an M&A turndown is unlikely, according to Tyler Giesting, director of the transaction consulting firm West Monroe.

“I don’t know that I would expect there to be that much more of an additional chilling effect on market, M&A activity if DOJ were successful. There are a lot of other market factors. But as far as activity goes,” Giesting told Hospice News. “Everything seems to point to platforms gearing up to exit on the basis of favorable kind of tailwinds, relatively stable reimbursement landscape, particularly hospice, obviously the broader macro aging population trend. All of the things that point towards home-based care only growing.”

The DOJ alleges that UnitedHealth Group is overcoming the competition by acquiring them rather than beating them in the market.

“UnitedHealth Group Incorporated and Amedisys, Inc. are two of the largest home health and hospice service providers in the country,” DOJ indicated in the complaint. “Today, competition between UnitedHealth and Amedisys benefits millions of Americans who need home health or hospice services. But the proposed merger between UnitedHealth and Amedisys would forever eliminate that competition.”

DOJ’s chief concern is that the combination of the two companies would dampen competition in the hospice and home health space. Should the transaction proceed, Optum would control 30% or more of the home health or hospice services in eight states, according to the Justice Department’s complaint. The deal would expand Optum’s home health and hospice footprint to five additional states, allowing the company to gain nearly 500 locations in 32 states.

A UnitedHealth Group-Amedisys victory could lead the way for more larger acquisitions by payer companies.

“It would set a precedent that allows larger health plans to pursue bigger and bigger home-based care providers for one space that is increasingly being looked at to affect [the health care] spend in a way that’s positive for health plans,” Joe Widmar, senior manager for West Monroe, told Hospice News. “I wouldn’t be surprised if in an Amedisys victory, you start seeing a ratcheted up interest in larger home-based care enterprises.”