The Great Hospital/Home Health Divorce Movement

by Tim Rowan | Nov 8, 2024 | Admin, Editorial, M&A, Regulatory

by Tim Rowan, Editor Emeritus

Hospitals Divesting Home Health Departments

Is this an early omen of two related trends? A number of hospitals are divesting their home health departments, while large health insurance companies are swallowing up large home health companies.

Beckers reported on October 23 that Providence Health plans to spin off its home-health services along with hospice and palliative care into a new joint venture that will be managed by Compassus, a for-profit, Tennessee-based provider of home care services in 30 states. The move will affect about 700 patients receiving care every day in Spokane County.

The Catholic not-for-profit health system’s agreement with Compassus will be known as “Providence at Home with Compassus.”

After a regulatory review, the deal is expected to close in early 2025. Providence and Compassus will each own a 50% stake. The new venture is part of a strategy to expand and improve home-based services, but also to cut costs. Providence, which operates Sacred Heart Medical Center and Holy Family Hospital in Spokane, declined to disclose the financial details of the joint venture.

LHC Group Was Not Enough

A news release that surfaced on October 25 said that UnitedHealth Group representatives are set to meet with Justice Department officials to make the case for the insurance giant’s acquisition of Amedisys to be approved. The meeting is often the last step before the Justice Department decides whether to file a lawsuit challenging an acquisition, according to the news outlet.

Amedisys operates more than 500 facilities in 37 states. Shareholders approved the acquisition in September 2023, but the deal has been held up by regulatory scrutiny. Justice Department officials are concerned the deal could increase prices for home health, according to Bloomberg.

If approved, this would be phase two of UnitedHealth’s historic foray into our sector. United acquired LHC Group, a home health provider with more than 900 locations, in February 2023. If UnitedHealth’s acquisition of Amedisys is approved, the company would own 10% of the entire home health market, with significant overlap between Amedisys and LHC acquisitions in some Southern states, according to Bloomberg.

Regulators could approve the deal with some changes to address competition concerns, Bloomberg reported. In August, Amedisys and UnitedHealth agreed to sell a reported 100 home health and hospice care centers to VitalCaring Group if the merger is approved.

Three or More is a Trend

UnitedHealth is not the only insurance company interested in owning home health agencies and hospices:

Humana acquired Kindred, one of the nation’s largest HHAs, and rebranded it CenterWell Home Health. Today it operates more than 360 home health locations in 38 states. In 2023, the company said it would expand into in-home primary care in several states.
In 2023, CVS Health acquired home health provider Signify Health for $8 billion. The company won a bidding war for Signify over UnitedHealth Group, Amazon and Option Care Health. Signify Health has more than 10,000 clinicians.
Evernorth, Cigna’s health services arm, offers home health services with a staff of more than 430. In January, Cigna CEO David Cordani said home health was one area where it would focus on future acquisitions.
In 2021, Centene sold its majority stake in home-based primary care provider U.S. Medical Management. Centene retained a minority stake in the company.

Our healthcare sector is changing as the entire U.S. healthcare scene changes. Next week we will delve further into the ramifications of the CMS 2025 final rule and of course the political events of this week.

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Tim Rowan is a 30-year home care technology consultant who co-founded and served as Editor and principal writer of this publication for 25 years. He continues to occasionally contribute news and analysis articles under The Rowan Report’s new ownership. He also continues to work part-time as a Home Care recruiting and retention consultant. More information: RowanResources.com
Tim@RowanResources.com

©2024 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in Healthcare at Home: The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com

Justice Department Launches Antitrust Probe Against UnitedHealth Group

by Kristin Rowan | Feb 28, 2024 | Admin, Regulatory

by Kristin Rowan, Editor

DOJ Blocks Acquisition

History

The Biden administration has recently increased its efforts at antitrust enforcement against some of the largest companies in the U.S. These include Apple, Amazon.com, Live Nation Entertainment, and Alphabet’s Google unit. The enforcement of antitrust laws would restrain monopolies in the U.S. Thus far, the Justice Department has had questionable success in stopping mergers, but continues its crusade on monopolies. The administration has stated the the healthcare industry is a priority in its antitrust efforts.

The Wall Street Journal reported on February 27, 2024, that a new Antitrust investigation has been launched into UnitedHealth. This is not the first antitrust action against UnitedHealth Group. In 2022, the Justice Department sued to block UnitedHealth’s plan to buy Change Healthcare. That lawsuit was unsuccessful.

Current Action

According to the WSJ, The Justice Department has spent the last few weeks interviewing industry representatives in markets where UnitedHealth operates.

Investigators asked about relationship between UnitedHealth and Optum, the health-services arm of the company, which owns physician groups, surgery centers, and pharmacy-benefit managers. They specifically asked about the effects on the doctor-group acquisitions on rivals and consumers.

UnitedHealth has been under scrutiny for some time by the Justice Department. They have twice asked for information about the planned merger with Amedisys, a home health company. UnitedHealth is also facing a private antitrust lawsuit by a hospital system in California, siting strong-arm tactics to exert control over its affiliated physician groups and primary-care doctors.

Additional Inquiries

The DOJ isn’t stopping at antitrust probes. A concurrent investigation is looking into UnitedHealth’s Medicare billing issues, including documentation of patients’ illnesses. The more health conditions a patient has, the higher the Medicare payments. The DOJ is looking into “aggressive documentation” practices by UnitedHealth doctors and other healthcare providers.

Additionally, the merger between UnitedHealthcare and Optum medical groups could violate federal rules that cap the amount a health-insurance company retains from premiums. Health insurance plans should keep 15-20 percent of premiums for administrative costs, with the balance spent on patient care or sent as a rebate back to customers. Because UnitedHealthcare keeps their percentage of premiums and collects additional money from Optum, they may be well above the federal cap.

Response

UnitedHealth has denied any antitrust claims, stating that United Health and Optum don’t favor one another, and routinely work with competitors. UnitedHealth Chief Executive Andrew Witty testified that Optum has an “arm’s length relationship” with United Healthcare.

In an ongoing investigative series about CareMount/Optum, The Examiner News reporter Adam Stone, spoke with an anonymous insider who said, “If they are stopped before they become a monopoly, than that’s great, but they are headed down that road.” That same source has reported massive layoffs, mostly among C-suite executives, in the wake of the antitrust “document preservation notice” from the DOJ.

We will continue following the antitrust lawsuit and the objection to the merger with Amedisys.

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Kristin Rowan has been working at The Rowan Report since 2008. She is the owner and Editor-in-chief of The Rowan Report, the industry’s most trusted source for care at home news, and speaker on Artificial Intelligence and Lone Worker Safety and state and national conferences.

She also runs Girard Marketing Group, a multi-faceted boutique marketing firm specializing in content creation, social media management, and event marketing. Connect with Kristin directly kristin@girardmarketinggroup.com or www.girardmarketinggroup.com

©2024 by The Rowan Report, Peoria, AZ. All rights reserved. This article originally appeared in The Rowan Report. One copy may be printed for personal use: further reproduction by permission only. editor@therowanreport.com

Sources:

Mathews & Michaels. February 27, 2024. U.S. Opens United Health Antitrust Probe. Retrieved from: https://www.wsj.com/health/healthcare/u-s-launches-antitrust-investigation-of-healthcare-giant-unitedhealth-ff5a00d2?st=30zpi0dw9hktzlj&reflink=desktopwebshare_permalink

Stone. February 26, 2024. Justice Department Probing UnitedHealth/Optum Over Antittrust Concerns; Local Layoffs Enacted, More Forecast. Retrieved from: https://www.theexaminernews.com/justice-department-probing-unitedhealth-optum-over-antitrust-concerns-local-layoffs-enacted-more-forecast/