The divestiture of BrightSpring Health Services’ (Nasdaq: BTSG) ResCare Community Living division could indicate a shift in how the federal government evaluates and handles major health care transactions.
BrightSpring, in January 2025, entered into a definitive agreement to sell ResCare Community Living to Sevita, a provider of home and community-based specialty health care, for $835 million in cash consideration. Closure of the transaction was delayed by a Federal Trade Commission (FTC) antitrust complaint.
The FTC later cleared the deal after reaching an agreement with Sevita, which required the company to sell 126 intermediate care facilities to reduce any anti-competitive impact of the acquisition.
“There was competitive overlap in certain areas of the market, where, if the deal went through as proposed, it would have a materially negative impact on competition, meaning the the post-close entity would have so much control over that market in terms of delivery of care that it could have a negative impact on patients or payers,” Attorney Anthony Del Rio with the law firm of Katten, Muchin and Rosenman told Home Health Care News’ sister publication, Hospice News. “The basic concern is if a company gets too much control of a specific area of the market, they will be able to leverage that control in a way that is anti-competitive and will cause prices to increase.”
This could also impact wages, according to Del Rio. If a single employer controls the market, it reduces competition for potential employees, which can adversely affect compensation.
BrightSpring is a home- and community-based health care services platform that serves more than 400,000 patients daily across all 50 states. The Louisville, Kentucky-based company provides hospice, home health, primary care, rehabilitation, pharmaceuticals and behavioral health care.
The FTC’s purpose is to protect consumers and promote competition in the United States by preventing unfair, deceptive and fraudulent business practices, enforcing antitrust laws, and educating the public and businesses about their rights and responsibilities in the marketplace.
The agency’s willingness to reach a negotiated agreement with BrightSpring and Sevita signals a change in approach under the Trump administration compared to earlier presidencies, Del Rio said. Previous administrations, particularly Biden’s, often took a harder line.
“Under the Biden administration, the FTCs’ general [modus operandi] was, ‘We’re going to challenge it, period, and we’re not going to negotiate some resolution,” Del Rio said. “We are just generally opposed to big transactions of this nature, and so we’re going to try to step in and stop it.’ That’s versus, ‘Hey, we’re going to step in and say we’re concerned, but then if we can come to a resolution, we’ll negotiate.”
Case in point, the U.S. Department of Justice (DOJ) under Biden sought to block the acquisition of Amedisys by UnitedHealth Group (NYSE: UHN) through a lawsuit. The suit eventually ended in a settlement in which the two companies had to divest a certain number of care centers in key markets, due to antitrust concerns. This followed another DOJ legal challenge to UnitedHealth Group’s purchase of Change Healthcare, which a federal judge also allowed to go through.
This marked a deviation even from prior Democratic administrations, which were more prone to working out solutions that would allow deals to proceed, according to Del Rio.
The possibility exists that the FTC’s more recent approach, such as with the BrightSpring-Sevita deal, could make it easier for large health care acquisitions to go through.
“It could be easier. It remains to be seen. Directionally, this suggests that you’re going to have the opportunity to negotiate some solution to the problem. Ultimately, that’s easier, but it doesn’t mean it’s a slam dunk,” De Rio said. “While in some areas of policy, Republicans and Democrats can be very different in terms of enforcement, perspectives on health care and health care competition and costs and wages are an area where the Republicans and the Democrats generally are aiming in the same direction.”