Federal court blocks Anthem's acquisition of Cigna

The U.S. District Court for the District of Columbia last night issued an order blocking the proposed acquisition of Cigna by Anthem, which would have reduced the number of major national health insurers from five to four. U.S. District Judge Amy Berman Jackson said the Department of Justice and states challenging the deal “carried their burden to demonstrate that the proposed combination is likely to have a substantial effect on competition in what is already a highly concentrated market.” She also said, “There was considerable testimony that an enforced reduction in fees paid to providers through rebranding or contractual mechanisms could erode the relationships between insurers and providers. It would also reduce the collaboration that industry participants agree is an essential aspect of the growing trend to move from a pure fee-for-service based system to a more value based model as a means of both lowering the cost and improving the outcome of the delivery of health care in this country.” AHA President and CEO Rick Pollack said the ruling “confirms that the Department of Justice made the right decision in challenging the Anthem-Cigna mega-merger. As a result, millions of Americans have been protected from higher insurance costs, fewer choices of providers and less innovation in health care delivery. Both the court and DOJ agreed that access to and the quality of health care would be jeopardized by Anthem’s use of market power against providers. We are pleased that the ruling recognized the harm to consumers and providers from the mega-merger, and prevented the deal from moving forward. We will continue to work with others in the health care field to further protect affordability for health care for all Americans.” For more, see the AHA’s comments to DOJ on the proposed acquisition. Anthem said it intends to appeal the court’s decision.