Anthem-Cigna rift resurfaces as first phase of trial ends

The simmering divisions between Anthem and Cigna were once again on display Tuesday as the first phase of their antitrust trial wrapped up in federal court.

As Judge Amy Berman Jackson questioned lawyers from both sides, she was perhaps most critical of Anthem’s case, pointing out that data presented in a legal filing actually undercuts its own argument and questioning whether smaller insurers are actually significant players in the national market, according to the Wall Street Journal

For his part, Anthem lawyer Christopher Curran outlined why the deal would be beneficial to consumers, and downplayed the tension between Anthem and Cigna, saying it was mostly at the CEO level.

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But when Cigna lawyer Rick Rule spoke, he indicated the disagreements went further than just at the top rungs of leadership. He also said Cigna didn’t join in a recent legal submission from Anthem because it didn’t reflect Cigna’s perspective, to which Jackson replied, “What am I supposed to make of that?”

Jackson also questioned the DOJ’s key arguments against the deal, noting that Anthem is more adept than Cigna at negotiating prices with healthcare providers. Yet DOJ lawyer Jon Jacobs argued that using market power to gain leverage over providers is in fact an antitrust violation.

Tuesday’s proceedings conclude the first phase of a trial that had been split into two parts—the first concerning the effect on national employer accounts, and the second focusing on more local markets. Aetna and Humana are also defending their deal in an antitrust trial that began Dec. 5.

Based on a recent call with a healthcare antitrust specialist, Leerink Partners analyst Ana Gupte writes in a new brief that Jackson is viewed as leaning in favor of the DOJ’s case, and might even rule against the Anthem-Cigna deal before the second half of the trial begins.

Not only has the conflict of interest that Anthem faces as a member of the Blue Cross Blue Shield Association “come in very persuasively for the DOJ,” but the government also is likely to win out in how it defines the national account market, she writes. Anthem’s most compelling argument is the market efficiencies it estimates, but it is difficult to prove those are linked exclusively to the merger.