Brief

Reports: Trump to pick former Anthem lobbyist to head DOJ antitrust division

Dive Brief:

  • President Donald Trump is expected to pick a former lobbyist for Anthem, Makan Delrahim, to be the new head of the Department of Justice's (DOJ) antitrust division, which is overseeing the court case against the health insurance giant's pending $54 billion acquisition of Cigna, several news outlets reported. 
  • Delrahim, who currently serves as the president's deputy counsel, was a partner at Brownstein Hyatt Farber Schreck, which received $370,000 in lobbying fees from Anthem from 2015 through 2016, according to a report from the International Business Times.
  • A lobbying report says the firm participated in the “antitrust issues associated with Anthem's proposed acquisition of Cigna,” IBT adds.

Dive Insight:

This case, brought on by the DOJ in July 2016, is now at the Court of Appeals as the payers seek to overturn a federal judge's decision to block the merger last month, citing concerns with increased prices to consumers, decreased competition and hindered innovation efforts in the insurance market. 

The pick could help make Anthem's arguments for acquiring Cigna more convincing in the Court of Appeals, though it may also continue to raise antitrust concerns with the payer's motives. Delrahim, who previously served as deputy assistant attorney general for the DOJ’s antitrust division, must be confirmed by the Senate to return to the division as its head.

Last week, the American Hospital Association (AHA) submitted its argument in support of the court blocking. The combined company, which would become the largest insurance company in the country, would result in reduced innovation at a time when it is most needed for the shift toward value-based care, according to the AHA. This was followed by similar arguments from the American Medical Association (AMA). Anthem claims the combined company would create medical cost savings yet "paying providers less comes with significant costs: it will damage patient care, stifle innovation, and cause patients to use more healthcare services," the AMA argued. 

This wouldn't be the first time that a former lobbyist for one of the two insurance companies would oversee the case. In June 2016, the International Business Time's request for any record relating to the documented conversations between a longtime Cigna lobbyist, who was leading the review process, and both payers was rejected by the Insurance Department of Connecticut. It denied having any of these records in its custody. 

While Cigna has had cold feet about the deal since last year, Anthem has remained determined to have it go through. A chart the payer included in its February announcement of the temporary restraining against Cigna it had requested to prevent it from terminating the deal shows "Anthem's intense efforts to obtain regulatory clearance and Cigna’s matching efforts to sabotage that goal."

The statements made in the announcement also suggested Anthem believes the deal could stand a better chance under the Trump administration. Anthem has been in talks with the Trump administration, which is pushing for a major transformation of the healthcare system with its ACA repeal-and-replace efforts. CEO Joseph Swedish has come out in support of the GOP's ACA repeal bill, the American Health Care Act. Also, Anthem paid $100,000 to Trump’s inaugural committee, IBT reports.

The restraining order against Cigna was granted. Cigna subsequently submitted a brief with the Court of Appeals deferring to Anthem's argument that the court blocking of their deal should be reversed, though Anthem is contractually required to be "responsible for developing and leading the antitrust strategy," according to Cigna.

If the merger isn't completed by April 30, Anthem would have to pay Cigna a contractual breakup fee of $1.85 billion — a significantly smaller amount than what Cigna argued it is owed (at least $13 billion in damages) in the lawsuit it filed against Anthem last month attempting to put an end to the merger plans. The oral argument is set to begin Friday, March 24. 

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Filed Under: Payer Health Law Policy & Regulation