Today, the Federal Trade Commission took action to protect Americans with intellectual and developmental disabilities and their families by requiring Sevita Health (Sevita) to divest more than 100 healthcare facilities to resolve antitrust concerns surrounding its proposed $835 million acquisition of BrightSpring Health Services, Inc.’s (BrightSpring) community living business.

Sevita, a subsidiary of Centerbridge Seaport Acquisition Fund, L.P., seeks to acquire BrightSpring’s community living business—ResCare Community Living (ResCare)—which would combine the two largest national providers of residential services to individuals with intellectual and development disabilities, known as IDD services.

Under the FTC’s proposed consent order, Sevita will be required to divest 128 intermediate care facilities (ICFs), which provide IDD services, and other assets such as day-training programs. The divested facilities—which are in Indiana, Louisiana, and Texas—will be acquired by Dungarvin Group, Inc. (Dungarvin), an experienced and well-regarded operator of ICFs.

The FTC’s proposed consent order settles FTC charges that Sevita’s acquisition of ResCare from BrightSpring would reduce the quality of care and options for ICF services for individuals with intellectual and development disabilities in certain markets within Indiana, Louisiana, and Texas.

“The FTC’s action today ensures that individuals with intellectual and developmental disabilities and their families continue to benefit from competition between community living providers,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “In the relevant geographic markets, this acquisition threatened to limit healthcare facility options and degrade the quality of care for those with intellectual and developmental disabilities. The FTC will continue to actively review acquisitions in healthcare markets to ensure that competition is driving higher quality care for all Americans—including some of our nation’s most vulnerable citizens.”

The FTC’s complaint alleges that Sevita’s acquisition of ResCare would eliminate competition between Sevita and BrightSpring, which has been critical to ensuring the two providers compete on quality and choice. A reduction in quality of ICF services could result in a reduced incentive to maintain, invest in, or improve facilities, staffing levels and training, care standards, safety protocols, and individualized services—which are all critical factors for vulnerable populations.

A reduction in choice would lead to a reduction in the variety of providers, curtailing families’ ability to select facilities aligned with their unique needs and preferences. A reduction in quality and choice directly impacts the dignity, autonomy, and well-being of individuals with intellectual and development disabilities, the FTC’s complaint alleges.

The FTC’s proposed order requires the facility divestitures and specifies, among other terms, that:

• Sevita shall assist Dungarvin in obtaining all licenses, permits, authorizations, or certifications related to or necessary for the operation of the divestiture facility assets;
• Until one year after the divestiture date, Sevita shall cooperate with and assist Dungarvin to evaluate independently and offer employment to any divestiture facility employee; and
• For a period of 10 years once the consent order is issued, Sevita shall not, without providing advance written notification to the Commission, acquire, directly or indirectly, through subsidiaries or otherwise, any leasehold, ownership interest, or any other interest, in whole or in part, in any ICF/IDD located within the same core-based statistical area in Indiana, Louisiana, and Texas as any divestiture facility.

The Commission vote to issue the complaint and accept the consent agreement for public comment was 2-0.

The public will have 30 days to submit comments on the proposed consent agreement package. Instructions for filing comments appear on the docket. Once processed, they will be posted on Regulations.gov.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions.