This audio is auto-generated. Please let us know if you have feedback.

Dive Brief:

  • UnitedHealth has closed its $5.4 billion acquisition of home health business LHC Group, continuing a trend of payers elbowing into direct care delivery.
  • LHC will become a part of UnitedHealths’ health services division Optum. The company’s home and community-based care, combined with Optum’s value-based experience and resources, will facilitate UnitedHealth’s ability to deliver integrated care as demand for care in the home increases, according to an 8-K filed by LHC on Wednesday.
  • The close was expected, after an updated Nasdaq delisting notice identified Tuesday as the last trading day for LHC.

Dive Insight:

UnitedHealth agreed to buy LHC for $170 a share in late March. Speculation that the Federal Trade Commission would move to block the deal abounded after regulators asked the companies for more data, extending the closing date, but reports late last month suggested regulators were unlikely to challenge the transaction.

UnitedHealth has said the combination of Louisiana-based LHC with Optum will help the integrated health giant provide longitudinal care. Optum operates a home health and hospice business, and adding LHC should bolster its footprint.

LHC manages a sizable share of the home health market, with more than 960 locations in 37 states and revenue of $2.2 billion in 2021.

A growing number of health insurers, private equity firms and hospitals have been acquiring home health companies and building out home care programs. Providing convenient, high-quality care at a lower cost could prove to be exceedingly lucrative as the U.S. population ages, which should increase demand for care models like those in the home, and reimbursement for seniors remains high in programs like Medicare Advantage.

Insurers also keep more of the premium dollar for themselves, if their members receive care at sites they own. That’s one major driver of the current primary care M&A frenzy, as health insurance companies like UnitedHealth, CVS and Cigna pursue vertical integration to keep more of their dollars in-house.

Snapping up home health assets makes the most sense for large Medicare Advantage insurers, as they ramp up their medical presence at home to track patients’ health conditions and coordinate care, according to a Cowen note on the deal’s announcement. UnitedHealth has frequently highlighted its MA business as a key growth area, and its Optum branch already conducts at-home assessments.

However, these ancillary services have led to concerns that MA plans are using chart reviews and health risk assessments to get higher payments from the government by making their members seem as sick as possible.

Regulators have increasingly cracked down on MA fraud and overpayments. The CMS earlier this year announced a plan to claw back billions of dollars in overpayments to MA plans stretching back to 2018, though critics say the agency could have done more to penalize bad actors.


By admin

Leave a Reply

Your email address will not be published. Required fields are marked *