Anthem faces tough questions from appeals court judges

As Anthem makes one last bid to fight for its merger with Cigna, a panel of three federal appeals court judges on Friday expressed skepticism about the insurer’s argument that the deal would ultimately benefit consumers.

The session kicked off Anthem’s appeal of the outcome of an antitrust case brought against it by the Department of Justice. In February, a federal judge ruled that the insurer’s bid to buy Cigna would unlawfully harm competition.

Anthem lawyer Christopher Curran argued Friday that the judge’s ruling “ignored medical cost savings” that would have resulted from the deal, which he said the insurer would have passed onto its customers, The Wall Street Journal reported.

However, those savings would come at a cost, as that would mean lower reimbursement rates for providers, the judges pointed out. In fact, the American Hospital Association has urged the appeals court to uphold the ruling that blocked the Anthem-Cigna deal.

In addition, Judge Brett Kavanaugh noted that a group known as Consumers Union had filed a brief arguing against the deal, and that no large companies filed any briefs in support of the merger, according to The Connecticut Mirror.

Kavanaugh also questioned DOJ lawyer Scott Westrich about whether the Anthem-Cigna deal would lead to lower costs for customers despite reducing competition, per the WSJ article. Westrich, though, argued that Anthem’s cost-savings projections were flawed.

As Anthem attempts to salvage its acquisition through the appeal, it has also had to contend with Cigna’s attempt to end the merger agreement and sue for damages. The two insurers are fighting that battle in the Delaware Court of Chancery, which has granted Anthem’s temporary restraining order to keep Cigna from exiting their contract.  

In the meantime, some groups have expressed concern that Anthem is making a political power play to get favorable treatment from the DOJ.

The American Medical Association sent a letter to Acting Assistant Attorney General Brent Snyder earlier this month warning against “politically driven settlement negotiations” between Anthem and the DOJ, noting that the insurer has made statements to indicate that the deal stands a better chance of closing under the Trump administration.

More recently, a group called United to Protect Democracy is calling for an investigation into whether the White House is interfering with Anthem’s appeals case.

Anthem CEO Joseph Swedish had voiced support for the American Health Care Act, the bill introduced by House Republicans and supported by President Donald Trump that never reached the House floor because it failed to garner enough GOP votes.