Colorado Medical Society

http://www.cms.org/articles/health-plan-mergers/

Health plan mergers

Monday, May 01, 2017 12:24 PM

On April 28 Anthem suffered another setback in its determined push to overcome a district court ruling and a break-up lawsuit by its future-ex-acquisition, Cigna, when the U.S. Court of Appeals for the District of Columbia upheld a lower court’s tough-worded ruling against Anthem that blocked their proposed $54 billion insurance mega-merger.

The opinion aligned closely with the federal district court’s finding that the merger acquisition was anti-competitive and agreed with the Department of Justice’s argument – supported by the American Medical Association, Colorado Medical Society and 16 other state medical associations where these mergers would have been most harmful, as well as Colorado Attorney General Cynthia Coffman and several other state attorneys general – that the acquisition would, like its predecessors, suppress the clinical authority of physicians; raise, not lower, premiums; and grant impermissible market concentrations that would invite abuse and unaccountability. In short, Anthem would have both monopolistic and monopsonistic powers over those markets, physicians, their patients, and other caregivers and institutions.

“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. “The result of 21 months of advocacy before the U.S. Department of Justice (DOJ), congressional leaders, state attorneys general, insurance commissioners, and federal court, this outcome shows again that when doctors join together, the best outcome for patients and doctors can be achieved.”

It is not yet known if Anthem will persist and petition the U.S. Supreme Court, but Anthem to date has vigorously fought Cigna’s lawsuit to bail out of the merger-acquisition and has moved to flank the courts politically, giving generously to the presidential inaugural activities, publicly endorsing a number of aspects of the White House-backed “repeal and replace” of the Affordable Care Act, and has seen one of their top antitrust lawyers moved to head the Antitrust Division of the Department of Justice.

“We must remain steadfast in our resolve to block Anthem’s power play,” said CMS President Katie Lozano, MD, FACR. “We are deeply grateful for the talent and resources brought to bear in this legal challenge by the AMA’s expert team, our very own Attorney General Coffman, and our colleagues in the most affected states.”