Becker's ASC Review

34 CODING & BILLING Cigna Terminates Deal With Anthem; Anthem Says Move 'Invalid' By Eric Oliver B loomfield, Conn.-based Cigna is terminat- ing its proposed merger agreement with Indianapolis-based Anthem. Here's what you should know. 1. A federal district court ruled against the merg- er on Feb. 8, 2017, citing the combined payers would limit competition as a primary reason for the ruling. 2. Cigna released a statement Feb. 14, 2017, say- ing it didn't believe the transaction would earn regulatory approval, and that terminating the agreement would be best for its shareholders. 3. Cigna filed a suit against Anthem in Delaware's Court of Chancery Feb. 14, 2017. Cigna needs a court order to limit Anthem from extending the termination date. The suit will allow the Cigna to collect its $1.85 billion merger breakup fee. 4. In addition to the breakup fee, Cigna is seek- ing $13 billion in damages. In the statement, Cig- na said, "These additional damages include the amount of premium that Cigna shareholders did not realize as a result of the failed merger process. This action is necessary to enforce and preserve Cigna's rights and protect the interests of its share- holders." 5. Anthem released a response saying, "Under the terms of the merger agreement, Cigna does not have a right to terminate the agreement. There- fore, Cigna's purported termination of the merger agreement is invalid," Reuters reports. n Aetna, Humana Forgo Deal Following Judge's Ruling: 4 Takeaways By Mary Rechtoris I n a mutual decision, Aetna and Humana opted to end their merger agreement after Judge John Bates of the U.S. District Court ruled in favor of the Department of Justice and blocked the deal. Here are four takeaways: 1. As per the deal's terms, Aetna will pay Humana a $1 billion break-up fee. 2. Aetna also ended its agreement to sell certain Medi- care Advantage assets to Long Beach, Calif.-based Molina Healthcare. Aetna will pay the applicable fees associated with ending that portion of the deal. 3. In a 156-page opinion, Judge Bates ruled the deal would significantly reduce competition in the Medicare Advantage market in 364 complaint counties and three complaint coun- ties in Florida. 4. In a statement, Aetna Chairman and CEO Mark T. Bertolini, said, "While we continue to believe that a combined com- pany would create greater value for healthcare consumers through improved affordability and quality, the current envi- ronment makes it too challenging to continue pursuing the transaction. We are disappointed to take this course of ac- tion after 19 months of planning, but both companies need to move forward with their respective strategies in order to continue to meet member expectations." n Healthcare Uncertainty May Yield Major Premium Increases By Mary Rechtoris T he nation's policy makers are debating the best course of action for the ACA, leaving many payers unsure of how to proceed. Kaiser Health News reports this uncertainty may likely cause many payers to increase their rates to avoid major losses. Here are six key notes: 1. New Mexico Health Connections CEO Martin Hickey said the payers may either increase consumers' premiums next year by 7 percent, or 40 percent. He referred to the current healthcare landscape as "pretty massive confusion." He told KHN, "e more uncertainty they create, the higher the rates" for 2018. 2. Payers may err on the side of caution as they weigh the possibility of the government eliminating coverage for millions. If payers increase their rates, consumers will likely pay more for healthcare. 3. Many insurance companies canceled their coverage options or increased their rates by double digits during the most recent ACA enrollment period. roughout the nation, some states are requiring payers to submit prelimi- nary 2018 rates within the next two months. 4. Leading payers are contemplating withdrawing from ACA exchanges as policy makers go back and forth. Bloomfield, Conn.-based Cigna Chief Ex- ecutive David Cordani said the company will conduct a full analysis to decide whether it will offer plans next year. Mr. Cordani said the exchanges were "unsustainable" in a call with analysts. 5. Meanwhile, some GOP leaders are voicing their frustration with the time- line of the ACA repeal. Speaker Paul Ryan (R-Wis.) had said he wants legisla- tors to repeal and replace the health law by the end of March. 6. Fox News' Bill O'Reilly conducted an interview with President Donald Trump earlier this month. Mr. O'Reilly asked President Trump if the Ameri- can people can expect a health plan rollout this year, to which, President Trump said, "I would like to say by the end of the year at least the rudiments but we should have something within the year and the following year." n

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