Vitalcaring Deal Reportedly Suspended As Unitedhealth, Amedisys Seek Path Forward

Amedisys’ (Nasdaq: AMED) planned divestiture of more than 100 home health and hospice locations to VitalCaring has reportedly been halted following a federal court ruling that requires Texas-based VitalCaring to allocate a significant portion of its future profits to Encompass Health and Enhabit.

Amedisys in June announced an agreement to sell some of its locations to the private equity-backed home health and hospice provider VitalCaring. The agreement included potentially more than 100 locations.

The VitalCaring transaction was contingent on approval of Amedisys’ $3.3 billion acquisition by the UnitedHealth Group (NYSE: UNH) subsidiary Optum. Amedisys planned to move forward with the VitalCaring divestiture in order to mitigate federal antitrust concerns surrounding its sale.

The news to cancel the divestiture comes after a recent court order issued by a federal judge in Delaware requiring that VitalCaring allocate 43% of future profits to Encompass Health (NYSE: EHC) and Enhabit Inc. (NYSE: EHAB). The two companies alleged in a lawsuit that the founders of VitalCaring, including CEO April Anthony, used unethical practices to establish the company, adversely affecting both companies. Anthony previously served as CEO Encompass’ home-based care segment.

“UNH had abandoned VitalCaring as a divestiture buyer after the Delaware Chancery decision against VitalCaring’s executives,” Brian Tanquilut, an equity analyst at Jefferies, stated in a note shared with Home Health Care News. “We believe that there are other potential buyers for the AMED/UNH divestiture assets, including some strategic acquirers that had previously put in bids for the previous set of agencies that the companies tried to divest.”

Amedisys provides home health, hospice and palliative care, among other services to more than 465,000 patients annually across 38 states and Washington D.C. The potential divestiture of some of its home health and hospice assets could help facilitate the completion of its sale to Optum by the end of 2025, according to the analysts.

However, the transaction faces other hurdles.

The divestiture announcement marks the latest iteration of the Amedisys acquisition, which Optum announced in June 2023. Last summer, the U.S. Department of Justice (DOJ) began investigating potential antitrust concerns related to the deal. The DOJ in November filed an antitrust lawsuit, citing multi-faceted concerns that included potentially adverse impacts on competition as well as on home-based care workers and payers.

The companies noted that the assets in the VitalCaring divestiture package will “likely change” following a review of the DOJ’s Complaint, the Jefferies analysts indicated. A new buyer of the assets included in the sale must be identified by March 31, 2025.

The DOJ performed a similar investigation — and filed a lawsuit — when Optum acquired the health care technology company Change Healthcare. A federal court eventually allowed that deal to proceed.

Amedisys and UnitedHealth recently entered a new waiver agreement to extend the transaction’s completion deadline until 10 days after a final court decision is issued in the DOJ antitrust lawsuit, or by Dec. 31, 2025, whichever comes first. The deal was previously anticipated to close at the end of 2024.

The companies are also proposing a trial start date of Aug. 18, 2025 in advance of the DOJ’s proposed date of Oct. 27, 2025, according to the Jefferies analysts.

Amedisys declined to confirm this report to Home Health Care News.

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