AHA: Anthem-Cigna would hinder innovation needed for value-based care shift

Dive Brief:

  • The American Hospital Association (AHA) submitted a brief Thursday to urge the Court of Appeals to uphold the court decision that blocked Anthem's $54 billion acquisition of Cigna. 
  • The organization representing hospitals, health systems and other care providers argued the combined company would reduce innovation in the health insurance market at a time when it is most needed to continue shifting the healthcare system away from the fee-for-service model toward value-based care. 
  • Court documents in the case brought on by the Department of Justice (DOJ) last July suggest "Anthem has been less willing than Cigna to innovate and develop value-based reimbursement systems," the AHA wrote. 

Dive Insight:

The potential for innovation efforts in the insurance market to be hindered because of the acquisition has been used as an argument to prevent it from being finalized by the DOJ and the federal judge that blocked it. But the AHA has delved into the specifics of why this is a major concern. The oral argument will begin on March 24.

Anthem has said it is "committed to completing this value-creating merger either through a successful appeal or through settlement with the new leadership at the Department of Justice." However, the AHA contended that the success of value-based reimbursement models "depends critically on the willingness of payers to experiment, innovate, and collaborate with hospitals and physicians to develop new payment methodologies that go beyond the old fee-for-service system." And there is "substantial evidence that underscores Cigna’s particular reliance 'upon innovation to compete,'” the organization added.

AHA's brief comes days after the DOJ, several states and the District of Columbia also urged the Court of Appeals to maintain the court blocking of the deal. There is "overwhelming evidence – uncontested by Anthem on appeal" that the merger would result in increased prices to consumers and reduced innovation among insurers, and that "showed Anthem had no real plan to achieve" the medical cost savings it claimed the combined company would create, they argued.

The Court of Appeals granted Anthem's motion for a speedy appeal process last month as the insurance giants have until April 30 to complete the deal. If they fail to meet their deadline, Anthem would owe Cigna a contractual breakup fee of $1.85 billion. Yet when Cigna attempted to terminate the deal in February it requested at least $13 billion in damages. Anthem stopped Cigna from terminating the deal with the granted restraining order it had asked for on the same day Cigna filed its lawsuit against Anthem seeking to end their merger plans.

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Filed Under: Payer Health Law Policy & Regulation
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