What the Behavioral Health Industry Can Learn from the BrightSpring-Sevita FTC Action

Antitrust attorney Kenneth Racowski was quoted in a Behavioral Health Business article about the Federal Trade Commission's (FTC) proposed settlement allowing BrightSpring Health Services and Sevita to move forward with their merger. When the FTC reviewed the deal – announced by BrightStart in January 2025 – it determined Sevita was the largest and BrightStart the second-largest providers of residential care for individuals with intellectual and developmental disorders (IDDs) in the United States, triggering concerns about a lack of competition and reduction in consumer choice following their consolidation. The proposed settlement incorporates structural remedies, most notably that Sevita sells some facilities to a third party, Dungarvin Group, in various markets.

Professionals interviewed by Behavioral Health Business said the development indicates competition in the healthcare industry remains top of mind for the government, though the FTC's decision to allow the deal to proceed marks a change from the agency's posture under President Joe Biden. Mr. Racowski explained that structural remedies such as spinning off portions of a combined entity in specific markets have been a longstanding feature of regulatory enforcement, clarifying that the Biden Administration's tendency to hash these details out in court differed from prior administrations. The biggest lesson from this case, he said, is that spinoffs are a viable option when negotiating with federal regulators.

"I think the last administration was the outlier," he remarked. "I think in taking that perspective, you could talk about the policy reasons and why they got to what they got to, but I think now, with this administration, the big picture takeaway in the merger review space is that divestitures are now back on the table."

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