United States et al. v. Aetna et. al., No. 1:16-cv-01494 (D.D.C. July 21, 2016)

U.S. DOJ and plaintiff states sued to block the merger of two of the country’s largest health insurers. According to the complaint, alleges that their merger would substantially reduce Medicare Advantage competition in more than 350 counties in 21 states, affecting more than 1.5 million Medicare Advantage customers in those counties. Before seeking to acquire Humana, Aetna had pursued aggressive expansion in Medicare Advantage. Aetna, the nation’s fourth-largest Medicare Advantage insurer by membership, has nearly doubled its Medicare Advantage footprint over the past four years. Humana is the nation’s second-largest Medicare Advantage insurer by membership. The lawsuit also alleges that Aetna’s purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on the public exchanges in 17 counties in Florida, Georgia and Missouri, affecting more than 700,000 people in those counties. The lawsuit alleges that by buying Humana, Aetna would eliminate one of its strongest and most capable competitors in these markets. The district court granted the injunction, rejecting the parties arguments that the Medicare Advantage and Medicare programs were competing products that constrained one another’s prices, and noting that Aetna’s exit from several markets, allegedly because of the Affordable Care Act, appeared to be designed to eliminate a problem with the merger, rather than being an unrelated business decision.

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United States et al. v. Anthem et al., No. 1:16-cv-01493 (D.D.C., July 21, 2016)

The US and plaintiff states sued to block the merger of two of the country’s largest health insurers. The complaint alleges that their merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that the elimination of Cigna threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians and other healthcare providers. According to the complaint, the merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry’s transition to value-based care. the court granted the injunction. Anthem appealed to the DC Circuit, which affirmed the district court.

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FTC and Pennsylvania v. Penn State Hershey Medical Center, 838 F.3d 327 (3d Cir. 2016)

The FTC administratively challenged the combination of Penn State Hershey Medical Center and PinnacleHealth System, alleging that the merger would substantially reduce competition for general acute care inpatient hospital services in the area surrounding Harrisburg, Pennsylvania, leading to higher costs and reduced quality. The FTC and Pennsylvania filed a motion for preliminary injunction in federal court in Pennsylvania. The court denied the motion by the FTC and Pennsylvania in an opinion filed under seal, holding that the plaintiffs did not properly define the relevant geographic market. The FTC and Pennsylvania appealed to the 3rd Circuit, which reversed the district court and granted the preliminary injunction. The Third Circuit rejected the District Court’s reasoning on all counts: market definition, the relevance and persuasiveness of the parties’ 5-year contracts with payers, whether the claimed efficiencies were cognizable and potentially sufficient to overcome the government’s prima facie case, and how the equities should be balanced in an FTC preliminary injunction proceeding. The parties abandoned the merger. The 3d Circuit denied Pennsylvania’s claim for attorneys’ fees on the grounds that the relief was granted under FTC Act Sec. 13(b), which does not authorize attorneys’ fees to prevailing parties.

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