Appeals court blocks $54B Anthem-Cigna merger

The U.S. Court of Appeals for the District of Columbia on Friday affirmed a district court decision blocking the $54 billion proposed merger between health insurance giants Anthem and Cigna.

In February, U.S. District Court Judge Amy Berman Jackson sided with the Department of Justice and blocked the proposed merger between Indianapolis-based Anthem and Bloomfield, Conn.-based Cigna on antitrust grounds. The judge held that the proposed merger would harm consumers by causing healthcare prices to increase and impede innovation and competition. Anthem filed an appeal in the case.

A three-judge appellate court panel issued a 2-1 decision Friday upholding the district court's decision. The court said Anthem failed "to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger."

The American Medical Association said it is pleased with the court's decision. "The appellate court sent a clear message to the health insurance industry: a merger that smothers competition and choice, raises premiums and reduces quality and innovation is inherently harmful to patients and physicians," said AMA President Andrew W. Gurman, MD.

Although this could be the end of the road for the proposed merger, Cigna still can't immediately walk away from the deal. A Delaware Chancery Court judge has barred Cigna from terminating the transaction pending the outcome of a May 8 hearing at which Anthem will ask the court to extend its order preventing Cigna from calling it quits on the proposed merger until the end of litigation. If the court denies Anthem's request, Cigna is free to terminate the proposed deal, according to Bloomberg.

The insurers have the option of appealing the case to the U.S. Supreme Court to try to save the deal.

A Cigna spokesperson told Becker's Hospital Review Friday that the insurer disclosed the appellate court's decision in a filing with the Securities and Exchange Commission but declined to comment further on the ruling. In a statement issued to Becker's, Anthem said it is committed to completing the merger and is reviewing the court's opinion to evaluate its options. Anthem said it "is disappointed by today's decision given that the demonstrated efficiencies make this a pro-competitive, consumer friendly transaction." 

More articles on payer issues:

Anthem CEO Joe Swedish: 58% of business in alternative payment models
BCBS of Minnesota pays back $328k in surprise medical bills
Centene sees Q1 revenue jump 69%, commits to 2018 ACA marketplace





© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.


Featured Webinars

Featured Whitepapers