- The U.S. Court of Appeals for the District of Columbia has granted Anthem's motion for a speedy appeal seeking to overturn the court ruling that blocked its $54 billion merger with Cigna in an antitrust case brought on by the U.S. Department of Justice last July.
- The new court order came two days after a Delaware Court of Chancery judge granted Anthem a temporary restraining order to prevent Cigna from terminating the deal, which was proposed in 2015.
- The Appeals Court's order includes the briefing schedule Anthem-Cigna and the DOJ must abide by during the rushed appeal process. The oral argument has been set to begin on March 24 and "no requests for extensions of time will be considered," the court filing states.
Cigna filed a lawsuit against Anthem last Tuesday arguing for a "declaratory judgment that Cigna has lawfully terminated the merger agreement" and seeking more than $13 billion in damages as well as the contractual breakup fee of $1.85 billion. Anthem responded with legal action of its own by filing for the temporary restraining order to stop the dissolution of the merger.
Anthem has argued that expediting the appeal is necessary to keep Cigna from terminating the deal and to be able to complete it before the health insurance giants' deadline, which was extended from the original deadline of Jan. 31 to April 30. It has also said a speedy appeal process would benefit consumers, the federal judge "made serious errors of law, fact, and logic," and it would "suffer irreparable harm" if the appeal is delayed. However, the average time a D.C. appellate judge spends on completing an appeal is 476 days (more than 15 months), Brigida Benitez, a partner at international law firm Steptoe & Johnson LLP, found in 2015. Anthem recently attempted to further extend the deal's deadline but its offer was turned down, which pointed to Cigna's increased apathy after several months gathering approvals from state regulators and shareholders.
While Anthem's win perhaps means the deal could once again stand a chance, considering that the insurers had been bickering in court for months and that they both filed lawsuits against each other last week, the decision to expedite the appeal may come as a surprise. The infighting revolved around issues like who is going to have seats at the senior level, according to Crystal & Company Executive Managing Director of Employee Benefits Services Michael Grant. The DOJ filed a court document last Wednesday urging the Court to deny Anthem's motion in light of the heated disagreements. "These developments gut Anthem’s arguments for expedited review, all of which are based on harms that would purportedly befall Anthem, Cigna, and the public if this Court did not review the district court’s decision enjoining the Anthem-Cigna merger before the merger agreement’s closing deadline—which Anthem argues is April 30, and Cigna believes has already passed," the DOJ stated in its filing.
Anthem contends the combined company is "poised to create $2.4 billion in medical cost savings annually." If the merger is completed, Anthem-Cigna would become the largest health insurance company in the nation, as noted in the court order that ruled in favor of the DOJ earlier this month. The judge concluded a finalized deal would have detrimental effects on the market, such as increased prices to consumers and diminished innovation efforts. This ruling was similar to the one that blocked the proposed $37 billion Aetna-Humana merger. Aetna and Humana mutually agreed to break up last Tuesday.
Many in the hospital industry joined the DOJ in voicing anticompetition concerns about the Anthem-Cigna merger, including the American Medical Association. Meanwhile, the insurance industry is watching the Anthem-Cigna case carefully. A completed deal also means there will be some layoffs and networks will get tighter, Grant tells Healthcare Dive. Grant says there is a strong group of people on the carrier side who may be watching because they may want to pursue similar merger and acquisition opportunities. Yet "until the fat lady has sung and it's over, then it's just speculation," Grant says. "The jury is still out."