Federal lawsuit won’t stop state review of Anthem-Cigna merger

July 24--CONCORD -- Even though the state attorney general has joined a federal lawsuit to block the proposed merger of health insurance giants Anthem and Cigna, the state Insurance Department is continuing its review of the proposal.

"The two proceedings are completely separate," said Insurance Department attorney Jennifer Patterson. "So the fact that this lawsuit has been filed doesn't take away the commissioner's authority to hold a hearing and act on the matter. But as a practical matter, if the lawsuit succeeds, there's nothing for us to review."

The immediate effect of the lawsuit, Patterson said, will be to afford a longer timeline for the Insurance Department review, pushing anticipated hearings on the merger to a later date.

The department still doesn't have all the information it needs from Anthem to hold hearings on the proposal as it currently exists, according to Patterson, and the department doesn't want to hold hearings on a proposal that could become moot.

"If the merger were to go forward, despite the lawsuit, it might go forward in changed form," she said. "So it would be premature to have a hearing before it was pretty clear that the deal we were reviewing will be the final deal."

The Insurance Department will continue to review data Anthem and Cigna have already provided, and will continue collecting information as the lawsuit proceeds.

"There is a broader scope that we look at, not just the impact on competition, although that is an important component," Patterson said. "We also look at regulatory issues, such as the financial condition of the companies, impact on policyholders, corporate structure. It's a different focus based on different information."

Blocking action

U.S. antitrust officials on Thursday moved to block the consolidation, with the support of New Hampshire, 10 other states and the District of Columbia.

The merger would hurt New Hampshire more than any other state served by the two companies, according to an analysis by the American Medical Association, released soon after the proposal was announced. If merged, the combined company would control nearly 64 percent of New Hampshire's health insurance market, well in excess of federal antitrust guidelines.

The federal Depart of Justice also sued to block the proposed merger of insurers Humana and Aetna, arguing the two multibillion-dollar mergers would reduce competition, raise prices for consumers and stifle innovation by cutting the number of large, national health insurers from five to three -- a combined Anthem-Cigna, a combined Humana-Aetna, and United Health Group.

Anthem spokesman Jill Becher issued a statement calling the DOJ action "an unfortunate and misguided step backwards for access to affordable healthcare for America."

"The DOJ's action is based on a flawed analysis and misunderstanding of the dynamic, competitive and highly regulated healthcare landscape and is inconsistent with the way that the DOJ has reviewed past healthcare transactions," she said.

The insurance companies say they plan to make their case in court, but will remain open to any efforts to reach a settlement.

Lawsuit applauded

Steve Ahnen, president of the New Hampshire Hospital Association, said the DOJ lawsuit echoes many of the concerns already raised in the state's community of health care providers.

"We believe this transaction would lead to higher prices for individuals and consumers and result in less, not more, innovation in how health plans contract with providers," he said. "We are pleased to see state and federal regulators taking an active role to protect consumers and businesses."

Marc Lacroix, legislative chairman for the New Hampshire chapter of the American Physical Therapy Association, said his group also welcomes the effort to block the merger.

"Many physical therapists practice in small physical therapist-owned clinics," he said. "These mom-and-pop shops already suffer from lack of negotiation leverage with the large insurers like Anthem. With a merger, these clinics would no longer have any negotiation leverage and be subject to a fee schedule imposed on them."

Joining the federal Department of Justice as plaintiffs in the lawsuit along with New Hampshire are the states of California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New York, Tennessee, Virginia and the District of Columbia.

dsolomon@unionleader.com

___

(c)2016 The New Hampshire Union Leader (Manchester, N.H.)

Visit The New Hampshire Union Leader (Manchester, N.H.) at www.unionleader.com

Distributed by Tribune Content Agency, LLC.