[grow_thumb image=”http://telecareaware.com/wp-content/uploads/2017/05/sj8qohs2yc6xbxpx1bmm.jpg” thumb_width=”150″ /]The War of the Payers grinds on. It’s altogether appropriate that this is the 100th anniversary of the US entry into the Great War. It was marked by a costly strategy that stalemated in the trenches and fatally ground into dust over four years men, machines, national treasuries, and ultimately a world order. In this Editor’s view, we are witnessing it writ large in Anthem’s, and to a lesser extent Cigna’s, actions after their merger was put paid to, first by a DC Federal District, then a District Appeals court, in a suit brought by the Department of Justice (DOJ) and 11 states.
Update: In Delaware Chancery Court May 8, Anthem requested a 60-day preliminary injunction to prevent Cigna from ending their merger. This was in a hearing on the February restraining order that Anthem received to block Cigna’s exit, filed in that court, from the merger after the District Court decision. Vice Chancellor Travis Laster said (after five hours of argument) that he would rule as soon as possible. Reuters New: Even Judge Laster admits it’s a ‘long shot’ that Aetna could find a path to success after two courts turned down the merger. Cigna’s legal spokesperson further amplified that, stating that it was ‘a near impossibility’ and that no “divestiture package would have solved” the merger’s problems. Bloomberg See the back story below
Watch for fireworks whatever the decision. Antitrust lawyer David Balto rated its potential “more fun than watching an episode of [the television melodrama] Dallas“. CT Mirror
The Chancery Court action is far more important than Anthem’s ‘petition for writ of certiorari’ to the Supreme Court of the US (SCOTUS) for review of the lower court ruling, citing the following:
- The 2 to 1 split in the court decision
- That the 1960s court precedents relied on by the District Court must be updated to today’s understandings of economics and consumer benefit
- And asserting that the loss of the merger “would limit access to high quality affordable care for millions of Americans and deny them more than $2 billion in medical cost savings annually” from the improved bargaining power of the new entity
(What perhaps was not included was that the merger partner, Cigna, wants out, out, out of the merger, which does tend to put a negative cast on the whole affair, as it did for the DC District Court.)
This Editor believes that the Chancery Court decision to extend for 60 days–into July– is critical to any SCOTUS hearing, as it is unlikely there would be any merit in a review of a dead deal even if there is a potentially novel issue. In the Reuters report, Anthem’s attorney mentioned the SCOTUS petition with a decision date by early July (the end of the term). He confirmed their intent to appeal to the DOJ for a ‘negotiation’ once the Trump Administration had its nominated officials in place. In Bloomberg, Cigna’s attorney’s position is that SCOTUS wouldn’t even consider the petition until September, which would put it past the extension and a decision into the next term.
Petitions for writ of certiorari are the Hail Mary pass–the last-ditch move–of court actions. (more…)