What Anthem-Cigna merger rejection means for your practice

Last month, federal judge Amy Berman Jackson of the U.S. District Court for the District of Columbia ruled against the proposed $54 billion merger between Anthem and Cigna, the second- and third-largest commercial health insurers in the country.

 

Related: How did Medicare become the highest paying carrier?

 

The merger would have created the largest health insurance company in the United States. The U.S. Department of Justice brought the case against the merger, arguing that it would violate antitrust laws by creating a company so large that it would squelch competition from smaller companies in the health insurance market.

Anthem had claimed that the cost savings achieved by the merger would actually reduce premium prices for consumers, because it would allow the merged company to cut its own operating costs. This, Anthem said, would result in a new ability to offer lower-priced options to customers..

Judge Jackson rejected this argument, however, noting that Cigna itself found Anthem’s cost savings claim lacking in credibility.

“Cigna officials provided compelling testimony undermining the projections of future savings, and the disagreement runs so deep that Cigna cross-examined the defendants’ own expert,” Jackson wrote in her ruling. “The Court cannot properly ignore the remarkable circumstances that have unfolded both before and during the trial.”

The judge’s order said that the merger had the potential to drive up costs to consumers, and to reduce choice for patients by creating a more restricted list of in-network healthcare providers.

This would have dire consequences for primary care physicians who chose to accept other insurance offered by the national and state healthcare exchanges.

 

Further reading: As insurers leave Obamacare exchanges, doctors pay the price

 

The Physicians Advocacy Institute (PAI) applauded the judge’s decision. The institute advocates for fair and transparent payment policies to doctors from insurance companies and others.

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