Media Report: Anthem Loses Appeal to Overturn Blocked Merger with Cigna | Healthcare Informatics Magazine | Health IT | Information Technology Skip to content Skip to navigation

Media Report: Anthem Loses Appeal to Overturn Blocked Merger with Cigna

April 28, 2017
by Heather Landi
| Reprints

According to a report from Bloomberg posted today, Anthem Inc. lost its bid to overturn a court ruling that blocked its planned merger with Cigna Corp.

As previously reported by Healthcare Informatics Managing Editor Rajiv Leventhal, on Feb. 8, a federal judge, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia, issued a ruling blocking the Anthem-Cigna merger.

The potential $54 billion deal to merge major health insurers Anthem and Cigna would have represented the largest health insurance transaction in the U.S. That Feb. 8 decision came just a few weeks after U.S. District Judge John D. Bates in Washington blocked the $37 billion Aetna-Humana merger.

In this latest development, according to Bloomberg reporters David McLaughlin and Andrew Harris in an article posted today, the U.S. Court of Appeals for the District of Columbia upheld the lower court ruling by a 2-1 vote, according to an order issued Friday.

According to the Bloomberg article, the panel wrote, “We hold that the district court did not abuse its discretion in enjoining the merger based on Anthem’s failure to show the kind of extraordinary efficiencies necessary to offset the conceded anticompetitive effect of the merger.”

The lower court judge ruled said the deal should be stopped because it risked undermining competition in the health insurance markets.

According to the report by Bloomberg, the two companies, Anthem and Cigna, have since sued one another, with Cigna seeking $1.85 billion breakup fee and Anthem blaming its rival for undermining their legal defense of the deal.

“A Delaware judge has barred Cigna from walking away from the merger pending the results of a May 8 hearing at which Anthem will ask the court to extend that order through the end of litigation there. Rejection of that request would effectively set Cigna free,” McLaughlin and Harris wrote.

The American Medical Association (AMA) issued a statement applauding the appeals court ruling. The AMA submitted an amicus brief to the appellate court in support of preserving the merger injunction issued in February. AMA argued that the merger “would harm patients because it would likely lead to higher premiums, eliminate the existing head-to-head competition between Anthem and Cigna, reduce the number of national carriers from four to three, and diminish innovation.” AMA further stated, “Unchallenged by today’s Court of Appeals ruling, these findings validate AMA’s ongoing concerns with highly concentrated health insurance markets.”

 “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,” AMA President Andrew W. Gurman, M.D., said in a prepared statement. “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.”

AMA further stated, “Barring an appeal to the U.S. Supreme Court, today’s decision concludes a successful campaign by the AMA and 17 state medical societies – on behalf of patients and physicians – to stop the Anthem-Cigna merger.”

 

Get the latest information on Health IT and attend other valuable sessions at this two-day Summit providing healthcare leaders with educational content, insightful debate and dialogue on the future of healthcare and technology.

Learn More

Topics

News

Study will Leverage Connecticut HIE to Help Prevent Suicides

A new study will aim to leverage CTHealthLink, a physician-led health information exchange (HIE) in Connecticut, to help identify the factors leading to suicide and to ultimately help prevent those deaths.

Duke Health First to Achieve HIMSS Stage 7 Rating in Analytics

North Carolina-based Duke Health has become the first U.S. healthcare institution to be awarded the highest honor for analytic capabilities by HIMSS Analytics.

NIH Releases First Dataset from Adolescent Brain Development Study

The National Institutes of Health (NIH) announced the release of the first dataset from the Adolescent Brain Cognitive Development (ABCD) study, which will enable scientists to conduct research on the many factors that influence brain, cognitive, social, and emotional development.

Boston Children's Accelerates Data-Driven Approach to Clinical Research

In an effort to bring a more data-driven approach to clinical research, Boston Children’s Hospital has joined the TriNetX global health research network.

Paper Records, Films Most Common Type of Healthcare Data Breach, Study Finds

Despite the high level of hospital adoption of electronic health records and federal incentives to do so, paper and films were the most frequent location of breached data in hospitals, according to a recent study.

AHA Appoints Senior Advisor for Cybersecurity and Risk

The American Hospital Association (AHA) has announced that John Riggi has joined the association as senior advisor for cybersecurity and risk.