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Washington Connection, July 27, 2016
Written by: MGMA Government Affairs

Government challenges mega health insurance mergers in court

The U.S. Department of Justice (DOJ) filed two lawsuits in federal court to block Anthem’s planned acquisition of Cigna and Aetna’s proposed takeover of Humana. The DOJ, joined by multiple states, argues the two mergers – valued at $54 billion and $37 billion – would substantially reduce competition in commercial, Medicare Advantage, and Patient Protection and Affordable Care Act exchange insurance markets across the country.

MGMA has a long-standing concern that consolidation among health insurers may increase premiums and out-of-pocket costs for patients and reduce access to physician practices as a result of less robust networks and a decline in plan benefits. Of particular concern is that the mergers could interrupt the health care industry’s move from volume-based to value-based reimbursement, as limited competition would put less pressure on insurers to develop innovative value-based payment models that support practices’ efforts to improve efficiencies through shared savings, new care coordination services, and payment for non-face-to-face patient interactions.  

While three of the four companies have stated their intent to defend the planned mergers in court, Cigna indicated it is exploring all options. If Anthem and Aetna continue to pursue their acquisitions, negotiations and court proceedings could drag on for many months. MGMA will keep members apprised of any significant developments.

 

 

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