LOUISVILLE, Ky. (WDRB) -- The four major health insurance companies whose mergers have been challenged by the Justice Department are now at odds with federal officials over how quickly the court cases should be resolved.
In separate filings Tuesday, Aetna and Humana – as well Anthem and Cigna – asked a federal judge for trial dates in the next few months, which would still allow the companies to close the deals by their respective deadlines should they prevail in court.
But the Justice Department said neither case should be ready for trial until Feb. 17, 2017.
Louisville-based Humana and its acquirer, Aetna, asked for a “mid-fall” trial to determine the fate of their $37 billion merger. Meanwhile, Anthem and Cigna want a trial that will allow their $54 billion deal to be decided on by the end of the year, according to separate court filings.
Aetna would potentially owe Humana a “break-up” fee of $1 billion if their deal is not closed by the end of the year, while Anthem would owe Cigna a $1.8 billion fee if that deal is not done by April 30, 2017.
But the Justice Department said it opposes the companies’ “attempts to rush” these cases, which are of “enormous” scope, because of self-imposed deadlines that the companies could voluntarily extend “with the stroke of pen.”
“These mergers threaten to harm millions of consumers across the country, as well as the doctors and hospitals who provide their medical care, “ the Justice Department said in a court filing. “That threat should be carefully evaluated.”
Lawyers for all four companies and the government will have a status conference before Judge John D. Bates of U.S. District Court in Washington, D.C. on Thursday, according to court records.
Aetna and Humana have already turned over more than 7 million documents and made 16 company executives available for depositions as part of the Justice Department’s “protracted” investigation into their merger, the companies said in their joint court filing Tuesday.
The government countered that each of the four companies took four or five months just to turn over documents during its investigation.
“That is the pace the Defendants established when the timing was in their control,” the Justice Department said.
Humana and Aetna also asked that their case be tried before Anthem and Cigna, arguing that there are fewer issues in dispute and that Humana-Aetna merger was announced about three weeks before the other merger in July 2015.
Humana and Aetna said their case will likely come down to a “single overriding issue” of whether traditional Medicare is a competitor to Medicare Advantage, the privately run version of the government’s healthcare program.
The government contends that Humana and Aetna’s Medicare Advantage plans will have too little competition from other private insurers if the deal is allowed, but the government does not consider original, fee-for-service Medicare to be a competitor to Medicare Advantage.
The government’s case “crumbles on its core claim” if the companies can persuade the judge that original Medicare is indeed competitive with Medicare Advantage, according to Humana and Aetna.
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