By: Zachary Tracer
By: Zachary Tracer
By: Zachary Tracer
May 14, 2017
The Wall Street Journal
New Jersey Gov. Chris Christie is waging an unlikely battle against the state’s largest health insurer in his administration’s waning months.
Mr. Christie, a business-friendly Republican who has claimed credit for cutting corporate taxes and regulations during his nearly two terms in office, is calling for more state control of Horizon Blue Cross Blue Shield of New Jersey, which covers 3.8 million people.
The nonprofit insurer has been in the governor’s crosshairs since his February budget address, when he called on the company to contribute to a new state addiction-treatment fund. The governor’s office asked the insurer for $300 million, a Horizon spokesman said, confirming reports.
Horizon, which reported $12.2 billion in revenue last year, resisted and said it would have to raise customer premiums to cover the cost. Mr. Christie has responded by publicly criticizing the insurer with escalating intensity, blasting it for lobbyist expenses, executive pay and perks.
Delaware Chancery Judge Travis Laster said Anthem didn’t deserve a 60-day extension to an earlier order barring Cigna’s exit because it was “incredibly unlikely,” the company could close the deal. However, the judge said there was significant evidence Cigna may have violated the merger agreement by dragging its feet on antitrust concerns, which could entitle Anthem to “potentially massive damages.”
“The reality is both parties probably have some risk and they’ll bargain for something between zero and $1.85 billion,” said Matt Cantor, an antitrust lawyer at Constantine Cannon.
Laster’s decision may be the final dagger to a deal that has been as notable for the bad blood between the two insurers as its antitrust roadblocks. Anthem is asking the U.S. Supreme Court to overturn rulings finding the deal flawed by antitrust problems, and the court is unlikely to weigh in now that Cigna has been allowed to walk.
Today the United States Court of Appeals for the District of Columbia Circuit affirmed a decision of the district court enjoining the proposed merger of Anthem and Cigna, two of the four largest health insurers in the country. Whatley Kallas filed an amicus brief on behalf of the American Medical Association in support of affirmance. The decision is a major victory for healthcare providers, whose reimbursements Anthem intended to reduce as a result of the merger and the loss of competition with Cigna.
A Copy of the Opinion. DC_Circuit_Opinion-Anthem
Appeals court upholds ruling that deal harms competition
Anthem Inc. failed to overturn a court ruling that blocked its planned takeover of rival Cigna Corp., capping a nearly two-year battle to complete a combination of two of the biggest health insurers in the U.S.
The federal appeals panel in Washington upheld a lower court ruling by a 2-1 vote on Friday. The court rejected Anthem’s key argument, that the medical savings resulting from a combination of the two companies were enough to offset any anticompetitive effects.
WASHINGTON — A federal appeals court panel on Friday asked tough questions of health insurer Anthem Inc., which is attempting to salvage its proposed $48 billion acquisition of Cigna Corp. after a trial judge blocked the combination as anticompetitive.
The Anthem appeal, which took place in front of a large crowd at the U.S. Court of Appeals for the District of Columbia Circuit, was surprisingly lively — and lengthy — as three judges said the case presented novel and difficult issues.
“We haven’t had a case like this,” Judge Brett Kavanaugh said.
The session was supposed to last for 40 minutes; the judges instead asked questions for about two hours.
Many of those questions focused on Anthem’s arguments that any anticompetitive problems with its purchase of a rival insurer were outweighed by what it said were billions of dollars in cost savings that would result.
That money would be passed along to employers and consumers in the form of lower health care costs, Anthem lawyer Christopher Curran argued. The trial judge who blocked the merger “ignored medical cost savings,” Mr. Curran said. “We believe that was an error.”
The D.C. Circuit judges, however, noted that Anthem’s cost savings would come at the expense of doctors and hospitals, which would face lower reimbursement rates from a combined Anthem-Cigna.
By JC Reindl
Blue Cross Blue Shield of Michigan’s chief executive saw his bonus jump last year as the health insurance giant saw better financial results and is now planning to lower rates for its small businesses coverage.
Total compensation for Daniel Loepp, CEO of Blue Cross since 2006, hit $10.9 million in 2016, up from $9 million in 2015. His specific compensation was $1.5 million in base salary, $8.3 million in bonuses and $1 million in “other” compensation, such as car allowance and life insurance, company officials said.
Law360, New York (March 14, 2017, 5:50 PM EDT) — A Texas federal judge on Monday rejected Blue Cross Blue Shield of Louisiana’s request for judgment in its favor, reconsideration or a new trial in a $26 million contract suit brought by Encompass Office Solutions over the insurer’s alleged anti-competitive actions and refusal to cover insurance claims.
U.S. District Judge Barbara M. G. Lynn did not issue an opinion with her order but said she would eventually do so. The insurer’s motion came after a jury agreed with Encompass’s argument that Blue Cross had refused to cover $1.4 million in claims and had used its control over the market to constrain the company’s business, resulting in the loss of $25 million in future revenue.
Judge Lynn ordered Encompass, a surgical services provider, to file a proposed final judgment by March 24.