UnitedHeathcare a player in insurance merger lawsuits

Washington – UnitedHealthcare, the nation’s largest health insurer and former potential suitor to merge with Cigna, provided the Justice Department with a large amount of sensitive, proprietary and confidential information to help the government investigate and block the mergers by its rivals.

In filings in the DOJ’s antitrust lawsuits against the mergers of Anthem-Cigna and Aetna-Humana, UnitedHealthcare said, “The sweeping scope of the DOJ’s concurrent investigations required United (Healthcare) to produce extensive, highly confidential documents and data.”

It is now trying, so far unsuccessfully, to prevent its rivals from gaining access to that information in court.

After it completed its investigation, the Justice Department in July sued to block Anthem’s proposed merger with Cigna and Aetna’s merger with Humana, saying the consolidation would reduce competition, drive up the cost of health insurance premiums and result in poorer medical care for millions of Americans.

“Materials include United’s business plans detailing how and where it intends to compete in the near future, pricing and product strategy, member and customer information, product design information, profit and loss data and projections, and provider rate information,” UnitedHealthcare said. “This is the very information on which United’s business is built and is likewise the information United uses to compete against Defendants.”

Although it may be an unwilling participant in the lawsuits against its competitors, UnitedHealthcare is a “movant,” or third party in the cases that has some stake in their outcome.

It has pushed back against attempts by its rivals to obtain the information UnitedHealthcare gave the DOJ, trying to amend a protective order to broaden protection of its sensitive proprietary information.

“United…a company seeking to avoid the new competition that would be created by the Anthem-Cigna merger,” had not released “a single page of that information” to Anthem “on the pretense of concern over the protective order,” Anthem complained.

The courts sided with Anthem and ruled against UnitedHealthcare’s efforts to further protect its documents.

It’s not known if Aetna or Anthem have received any of the information they sought because both declined comment.

So did UnitedHealthcare.

David Balto, an antitrust attorney and former Federal Trade Commission policy director, said “it’s pretty common in antitrust cases” for the Justice Department to request market information from other companies.

Still, the filings in the massive antitrust suit are bringing some of the relationships between the nation’s largest insurers to light.

Cigna, in its answer to the DOJ’s suit, revealed for the first time that it had been courted by UnitedHealthcare.

“Cigna further admits that over the course of several months in 2015, Cigna communicated with UnitedHealthcare in connection with UnitedHealthcare’s outreach regarding a potential proposed acquisition of Cigna,” the insurer said.

In the spring of 2015, the nation’s five largest health insurers began a round robin of merger talks. Besides Anthem’s successful bid for Cigna and Aetna’s partnership with Humana, UnitedHealthcare made overtures to Aetna, Cigna approached Humana and now it’s revealed that UnitedHealthcare also approached Cigna.

But the relationship between Anthem and Cigna has been rocky. The court filing reveal that the Justice Department plans to argue  the companies won’t be more efficient by merging because they can’t get along.

The special master in the case, Richard Levie, has agreed with the DOJ, asking the court to allow heavily redacted letters and e-mails between the two companies to become evidence.

An uphill battle

Judges with the U.S. District Court for the District of Columbia have set a Nov. 21 trial date to begin consideration of the Anthem-Cigna merger and Dec. 5  to hear the Aetna-Humana case.

It’s not clear how the Justice Department will use the information it sought from UnitedHealthcare in those trials.

The DOJ bases its case against the Anthem-Cigna merger on the argument competition in large group policies will shrink drastically if the insurers merge.  UnitedHealthcare said it  provided the DOJ with “all commercial health insurance information relevant to [large group policies].”

The DOJ’s case against Aetna and Humana centers on what it sees as the lack of competition in the Medicare Advantage market their merger would produce.

UnitedHealthcare said it gave the DOJ information it had on the Medicare Advantage market, and much more.

Andrew Barlow, a Washington, D.C.-based antitrust lawyer, said there’s no evidence UnitedHealthcare “played an active role in trying to prevent the mergers.”

“We don’t know what their motives were throughout the investigation,” he said.

As far as the outcome of the twin trials, Barlow said the insurers are at a disadvantage.

“It’s always an uphill battle for the defendants against the (DOJ’s) antitrust division,” he said.