Jayapal, Warren Call on DOJ, FTC to Scrutinize UnitedHealth-Amedisys Merger
“UnitedHealth Group’s proposed … acquisition of … Amedisys is the latest example of massive health care conglomerates using anticompetitive mergers to increase their market dominance, reducing competition, hurting patients, and increasing health care costs.”
“Blocking anticompetitive deals and rejecting the use of remedies will safeguard competition, and in turn protect patients and health care workers.”
Washington, D.C. – Today, Representative Pramila Jayapal (D-Wash.) and U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to the Department of Justice (DOJ) Antitrust Division and the Federal Trade Commission (FTC), urging them to carefully scrutinize UnitedHealth Group’s (UHG’s) pending acquisition of Amedisys. The lawmakers also urged the agencies to scrutinize similar deals, reject behavioral or structural remedies, and oppose any health care acquisition that would threaten competition, increase prices, and reduce quality of care.
In June, UnitedHealth Group announced it would acquire home health and hospice provider Amedisys for $3.3 billion, a deal that would increase its market dominance, reduce competition, hurt patients, and increase health care costs for consumers. UnitedHealth Group has rapidly become the largest health care conglomerate in the country, and has used its market power to further entrench itself in the entire health care ecosystem, including by acquiring another home health agency, LHC Group, just last year.
The lawmakers highlighted that UnitedHealth Group’s “enormous reach and vertically integrated structure has allowed the company to profit off of every part of the health care system, controlling and steering patients, workers, and taxpayers into more profitable services for UHG,” with current estimates finding that “25 percent of UHG’s total company revenue comes from subsidiaries alone.” UHG and other large insurers are looking to cash in on the booming home health industry, allowing them to keep more premium dollars in-house from treating patients at insurer-owned facilities.
“Without regulatory intervention, UHG has been able to reap excessive benefits by owning numerous components of the health care system and incentivizing its subsidiaries to maximize profit over care,” wrote the lawmakers. “In doing so, UHG has consistently denied care to patients, mistreated workers, and allegedly overcharged the government to grow its profits even more.”
In the letter, lawmakers also raised concerns about how profiteering – including in Medicare Advantage (MA) – is driving vertical consolidation in health care. By owning multiple parts of the health care system, UHG and other health care conglomerates can more easily use practices like upcoding to evade other federal regulations, resulting in higher prices and adverse outcomes for patients. Audits conducted by the Centers for Medicare and Medicaid Services (CMS) found that UHG overcharged the federal government at least 8 times in one year, resulting in millions in overpayments.
In July, the FTC and DOJ proposed new merger guidelines that suggest antitrust regulators will focus enforcement of antitrust laws on conglomerates – which should include UHG – to holistically examine their anticompetitive effects and potentially halt rampant vertical integration in health care. While recognizing the proposed guidelines, together with regulators’ increased scrutiny on UHG and other anticompetitive health care transactions, as signs of progress, the lawmakers called on the FTC and DOJ to “do more to uphold our antitrust laws and protect competition,” including blocking anticompetitive deals and refusing to accept remedies.
“We are encouraged by DOJ and FTC’s efforts to tackle consolidation by proposing updated merger guidelines that are more consistent than prior guidelines with the statutory text and Congressional intent of antitrust law,” concluded the lawmakers. “In line with these efforts, it remains important that DOJ and FTC closely assess health care industry transactions in the context of the industry’s increasing consolidation to stop massive, profit-seeking health care conglomerates from further limiting competition and increasing health care costs to the detriment of patients and taxpayers.”