UnitedHealth’s Interest in Amedisys Acquisition Questioned Amidst Proposed Payment Decrease
A managing director at financial services company Raymond James is raising doubts about UnitedHealth’s interest in acquiring Amedisys following the recently proposed 6.4% payment decrease for home health services. The Centers for Medicare and Medicaid Services released the proposed payment decrease last week, which could result in a $50 million hit to Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) in 2026, according to John W. Ransom, managing director and director of Healthcare Research at Raymond James.
Ransom questioned whether the home health rate update of 6.4% could potentially derail the deal between UnitedHealth and Amedisys. He noted that while the final CMS rule is expected to be more favorable than the proposed rule, this would mark the fifth consecutive year of challenging rate updates from CMS, with this year’s cut being the most significant yet.
The proposed payment decrease could pose a significant challenge for the deal between UnitedHealth and Amedisys, especially considering the ongoing legal battle with the Department of Justice. The deal is currently scheduled to go to mediation in August, and Ransom speculated whether UnitedHealth would be willing to walk away from the deal given the regulatory hurdles they are facing.
Amedisys, a leading provider of home nursing and hospice services with over 500 locations in 39 states, relies heavily on Medicare for payment. The proposed 6.4% payment decrease, which amounts to approximately $1.1 billion, could have a substantial impact on the deal’s financial viability.
The deal between UnitedHealth and Amedisys, valued at an estimated $3.3 billion, has faced opposition from the Department of Justice since November 2024. The DOJ raised concerns about the merger’s potential anticompetitive effects, particularly UnitedHealth’s potential control of 30% or more of the home health or hospice services market in eight states.
The future of the deal remains uncertain as both parties navigate regulatory challenges and the potential financial implications of the proposed payment decrease. UnitedHealth Group has yet to comment on the situation, leaving stakeholders and industry observers eagerly awaiting further developments.
In conclusion, the proposed payment decrease for home health services has cast a shadow of uncertainty over the UnitedHealth-Amedisys deal, raising questions about its feasibility in light of regulatory challenges and financial considerations. Stay tuned for updates as the situation continues to unfold.
