A federal judge has given final approval to the settlement between the U.S. Department of Justice (DOJ), Amedisys and UnitedHealth Group (NYSE: UNH) that allowed the transaction between the two companies to close. 

The U.S. District Court in Maryland entered the final judgment proposed by the DOJ’s Antitrust Division and the attorneys general of several states. It requires divestitures of some Amedisys and UnitedHealth Group home health and hospice locations.

In addition, Amedisys must pay a $1.1 million civil penalty to the United States for falsely certifying that it had provided “true, correct and complete” responses under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, the Justice Department indicated.

“This is a tremendous outcome for competition in the health care industry, where competition itself is critical to the public interest and the well-being of all Americans,” said Assistant Attorney General Abigail Slater of the Justice Department’s Antitrust Division in a statement. “I commend the Antitrust Division’s Staff for prosecuting this case throughout a contentious litigation to reach this settlement on behalf of seniors, hospice patients, nurses and their families.”

The UnitedHealth Group subsidiary Optum, in June 2023 inked its agreement to acquire Amedisys in an all-cash transaction of $101 per share, or about $3.3 billion.

Through a lawsuit, DOJ sought to block the acquisition due to antitrust concerns. The DOJ’s impetus behind the lawsuit against Optum and Amedisys was multi-faceted, citing potential adverse impacts on competition, home-based care workers and payers. In August, the parties to the case announced this recently approved settlement. Days later, the transaction closed.

The final judgement mandates the divestiture of at least 164 home health and hospice operations across 19 states, as well as one palliative care facility, accounting for approximately $528 million in annual revenue.

Two buyers in the divestiture are BrightSpring Health Services (Nasdaq: BTSG) and The Pennant Group (Nasdaq: PNTG).

The final judgement also does the following:

• Obligates UnitedHealth to divest eight additional locations if it fails to obtain regulatory approval for the divestiture of associated facilities without the additional locations
• Imposes a monitor to supervise UnitedHealth’s divestiture of the assets and compliance with the consent decree
• Provides the divestiture buyers with the assets, personnel and relationships to compete against UnitedHealth in the overlap areas
• Incorporates robust protections to strengthen adherence to the decree and deter interference with the divestiture buyers’ ability to compete

Amedisys offers home health, hospice and palliative care, among other services to more than 465,000 patients annually across 38 states and Washington D.C. On a consolidated basis, Amedisys earned $621 million in net service revenue during Q2, up from $591.2 million year over year. Its hospice segment brought in $215 million, up from $204 million in the prior year’s quarter.

UnitedHealth Group in 2023 also acquired the large home health and hospice provider LHC Group for $5.4 billion.