In late January, the Federal Trade Commission approved a transaction that will reshape the landscape of residential care for people with intellectual and developmental disabilities—but only after imposing conditions that amount to some of the most aggressive antitrust remedies the agency has ever applied to the behavioral health sector. The deal is straightforward enough in its mechanics: Sevita Health, the nation’s largest provider of home and community-based services for individuals with IDD, will acquire BrightSpring Health Services’ community living business, known as ResCare Community Living, for approximately $835 million. But the terms attached to the deal tell a far more complicated story about market power, vulnerable populations, and the limits of consolidation in an industry where the consequences of reduced competition are measured not in basis points but in human wellbeing.
The FTC’s consent order requires Sevita to divest 128 intermediate care facilities across Indiana, Louisiana, and Texas to the Dungarvin Group, an established operator of IDD residential programs across 15 states. For ten years following the divestiture, Sevita is barred from acquiring any ICF in the same core-based statistical areas as the divested facilities without providing advance written notice to the Commission—even if the deal would normally fall below Hart-Scott-Rodino filing thresholds. If Sevita fails to complete the divestitures, the FTC can appoint a trustee to sell the assets on its behalf, with no guaranteed minimum price.
The Market That Prompted the Intervention
There are approximately eight million individuals in the United States with intellectual and developmental disabilities, whose care represents more than $70 billion in annual spending. Medicaid is the predominant payer for these services. Sevita, a subsidiary of Centerbridge Seaport Acquisition Fund, employs roughly 41,000 people, serves approximately 50,000 individuals across 40 states, and generates approximately $3 billion in annual revenue. ResCare is the nation’s second-largest provider, operating in 25 states and generating approximately $1 billion in revenue in 2024. The FTC’s complaint focused specifically on markets in Indiana, Louisiana, and Texas where Sevita and BrightSpring’s ResCare arm were each other’s primary competitors for intermediate care facility services. In those markets, the Commission argued, the acquisition would leave families with as few as one or two alternatives, significantly curtailing their ability to select providers aligned with their needs. The resulting reduction in competition, the FTC alleged, could diminish the incentive to maintain or improve facilities, staffing levels, training, care standards, safety protocols, and individualized services—all factors critical for populations that are, in many cases, unable to advocate for themselves.The Quality Shadow
The quality concerns are not hypothetical. BrightSpring’s intermediate care facilities have a documented history of serious deficiencies. A 2022 investigation by BuzzFeed News found that from the time KKR acquired BrightSpring in 2019 through the end of 2021, the company’s group homes were cited for dangerous conditions at a rate well above the average for similar facilities. In the seven states with the most for-profit ICFs—California, Indiana, Louisiana, North Carolina, Ohio, Texas, and West Virginia—BrightSpring’s ResCare operated just 16 percent of the homes but accounted for 40 percent of serious citations, more than 500 in total. The investigation documented residents consigned to live in squalor, denied basic medical care, or effectively abandoned. State inspectors found 118 instances of dangerously low staffing—double the rate at non-KKR-owned facilities. In West Virginia, regulators accused BrightSpring of ignoring repeated warnings that contributed to at least one preventable death and ordered the company to stop accepting new residents, eventually closing 20 percent of its homes in the state. The reporting prompted Senators Patty Murray, Elizabeth Warren, Ron Wyden, and Bernie Sanders to write to KKR’s co-CEOs, demanding answers about what they called business practices that put patient safety at risk. BrightSpring and KKR disputed the findings. KKR said it had invested $200 million per year in quality initiatives and increased frontline worker compensation by 28 percent since its acquisition. BrightSpring called the BuzzFeed analysis inaccurate and fundamentally flawed. The company went public on the Nasdaq in 2024 under the ticker BTSG.
What the Consent Order Actually Does
The FTC’s proposed remedy is designed to preserve competition in the specific geographic markets where the overlap between Sevita and ResCare was most pronounced. The 128 divested facilities span multiple core-based statistical areas: in Indiana, the Evansville, Indianapolis, Muncie, Bedford, and Jasper markets; in Louisiana, the Baton Rouge area; and in Texas, the Austin, Beaumont, Houston, and San Angelo markets. The order imposes several conditions beyond the divestiture itself. Sevita must assist Dungarvin in obtaining all necessary licenses and permits to ease the transition. For one year after the divestiture, Sevita must offer employment to any employee of a divested facility, preventing staff attrition during the handoff. Sevita is also required to maintain the economic viability and competitiveness of the divested facilities until the transfer is complete, including providing sufficient funding and staffing to keep operations at current levels. The Commission described Dungarvin as a financially sound organization with more than a decade of experience acquiring and integrating IDD residential facilities, including in markets where it had no prior presence. The FTC voted 2-0 to issue the complaint and accept the consent agreement, which was open for public comment through March 9, 2026.A Precedent for Behavioral Health Consolidation
The Sevita-BrightSpring consent order is notable less for its specifics than for what it signals about the FTC’s posture toward consolidation in behavioral health services more broadly. The IDD market, like the ABA market, is characterized by heavy Medicaid dependence, significant geographic variation in provider density, vulnerable populations with limited ability to switch providers, and a wave of private equity-backed acquisitions over the past decade. The parallels to ABA are worth noting. The autism services sector has undergone rapid consolidation since the mid-2010s, driven by private equity firms attracted to Medicaid’s recurring revenue profile and the expansion of state insurance mandates. Many of the same competitive dynamics the FTC identified in the Sevita-ResCare case—localized market concentration, barriers to entry, and the potential for quality degradation in the absence of meaningful alternatives—exist in ABA markets across the country. Whether the FTC will apply similar scrutiny to ABA consolidation remains to be seen, but the framework it has established here could serve as a template. For the eight million Americans with intellectual and developmental disabilities and their families, the more immediate question is whether a consent order and a ten-year acquisition ban will be enough to preserve the competition that keeps providers accountable. The FTC’s analysis found that entry and expansion into the ICF market is unlikely to be timely, likely, or sufficient to offset the anticompetitive effects of the transaction. The barriers to entry—regulatory approvals, staffing requirements, facility standards, market demand—are high. The divestiture to Dungarvin is designed to fill the gap. Whether it does will depend on execution, oversight, and whether the agency that imposed the conditions has the resources to monitor compliance in a market that, until very recently, attracted almost no federal antitrust attention at all.
By: Ethan Webb
Ethan Webb is a staff writer at Acuity Media Network, where he covers the business of autism and behavioral health care. His reporting examines how financial pressures, policy changes, and market consolidation shape the ABA industry — and what that means for providers and families. Ethan holds a BFA in Creative Writing from Emerson College and brings more than seven years of professional writing and editing experience spanning healthcare, finance, and business journalism. He has served as Managing Editor of Dental Lifestyles Magazine and has ghostwritten multiple titles that reached the USA Today and Wall Street Journal bestseller lists.
