After seven news organizations objected to the sealing of testimonies given by Anthem and Cigna CEOs during their antitrust case last week, a judge ordered the transcripts — highlighting large disagreements over their proposed combination — be released Monday, reports The Wall Street Journal.
While relations between the two payers were questioned when both accused each other in September of breaching their $54 billion acquisition agreement, tensions have been kept, for the most part, concealed. However, the released testimonies from Anthem CEO Joseph Swedish and Cigna CEO David Cordani show Cigna officials questioned Anthem's proposed strategy after acquiring Cigna. In addition, Anthem officials attempted to push the deal forward unilaterally, as Cigna stopped working with Anthem on issues related to the proposed purchase.
Here are five highlights from the released testimonies.
1. Anthem created a highly confidential team to facilitate Bloomfield, Conn.-based Cigna's absorption into Indianapolis-based Anthem without telling Cigna officials. U.S. District Judge Amy Berman Jackson questioned Mr. Swedish how two companies could combine without communicating, to which the executive said the integration team was established following Cigna's refusal to work on certain issues related to the deal. Mr. Cordani confirmed Cigna ceased working on integration issues this summer over concern that Anthem's post-integration plans would impede Cigna's network and value.
2. The Justice Department questioned Mr. Swedish about internal documents highlighting disagreements between the two companies, citing one December 2015 note from Mr. Swedish to Mr. Cordani saying the companies' integration plans were "unacceptable." Another internal document from Anthem said consolidation planning was "severely constrained due to Cigna's lack of engagement," according to the report.
3. Cigna's CEO testified the deal's integration plan leaned toward Anthem and could negatively affect competition. The DOJ has argued the insurers' deal is anticompetitive and would hamper competition in 35 markets. While Anthem has argued its acquisition of Cigna would allow the resulting entity to be competitive, — lowering overhead costs and premiums — Mr. Cordani said under an Anthem-favored integration plan, "choice would potentially be constricted" for policyholders.
4. Mr. Cordani's role in a resulting Anthem-Cigna entity also instated tensions, as testimony revealed Cigna pushed back when it became clear Mr. Cordani's authority did not include oversight of the combined insurer's three business units. While Mr. Swedish ultimately expanded Mr. Cordani's responsibility, he said the Cigna CEO "never directly said to me that he's coming to the company," reports The Wall Street Journal.
5. In his testimony, Mr. Swedish said disagreements between the two payers will not halt the forward progression of the deal should the court rule in favor of the insurers, as he said the deal will make Anthem more innovative, efficient and curb costs. "I want to underscore all this stuff about conflict or whatever you want to call it; to me, it's noise that doesn't relate to the state of readiness we now have and our ability to move forward," Mr. Swedish said.
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