Medical Billing Outsourcing

Anthem-Cigna Merger

Insurance behemoth, Anthem lost their appeal of the February decision of a Federal Judge to block their 54 billion-dollar merger with Cigna. A three-judge panel rejected the appeal by Anthem, and the Department of Justice blocked their merger in the U.S. District Court noting the projected effect of the merger on competition in the market.

Anthem claimed that their merger with Cigna would result in administrative efficiencies that can lead to decreased insurance premium for the users. However, neither the U.S. Court of Appeals nor the U.S. District Court agreed with the claims of Anthem. After the ruling was made that blocked the merger, Cigna sued Anthem for 15 billion dollars as compensation for the damages to shareholders and contractual breakup fee.

On May 12, Anthem announced that they have terminated the merger with Cigna; a deal that would have combined the second and third largest sellers of insurance to large businesses in the nation. The termination declaration of the merger from Anthem was made two weeks after the U.S. Court of Appeals for the D.C. Circuit rejected the appeal of Anthem against an injunction issued by a U.S. District Court blocking the merger. The merger decision was terminated by Anthem a week after filing a writ petition at the U.S. Supreme Court.

Outsource Medical Coding

Department Of Justice

Initially, Cigna and Anthem entered into merger deal in 2015, which was challenged on antitrust grounds by the DOJ, the District of Columbia, and eleven U.S. states. The government said that if the merger were permitted, it would violate Section 7 of the Clayton Act (15 U.S.C. §18), as it would decrease the competition in the insurance markets, the national accounts (insurance bought by employers who have more than five thousand employees), and large group employers (employers with more than fifty employees).

Following the decision of the D.C. Circuit, Anthem filed a writ petition that request a review on how the Court decides on the efficiencies under Section 7 of the Clayton Act. Unfortunately, the termination of Cigna merger by Anthem might foreclose the chances of a Supreme Court review and the healthcare organization will need to find some other appropriate ways to get guidance on the viability of the efficiencies defense.