$2.5B BCBS Louisiana, Elevance Health sale on hold again

Blue Cross Blue Shield of Louisiana has put plans to be acquired by Elevance Health on pause again after the proposed sale faced scrutiny from physicians and state officials. 

According to a Feb. 14 statement from the Louisiana Department of Insurance, BCBS Louisiana withdrew its application to reorganize as a for-profit entity so it could be acquired by Elevance late on Feb. 13. Public hearings on the proposed sale were scheduled for Feb. 14 and 15. 

In a statement to nola.com, a BCBS Louisiana spokesperson said "it is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed." 

"This is why we have decided to again pause the process in our proposed transaction with Elevance Health. This means that we are withdrawing our filing with the Louisiana Department of Insurance," the spokesperson said. 

BCBS Louisiana has also canceled proxy voting among policyholders to approve the deal. 

This is the second time BCBS Louisiana has withdrawn its proposal to be acquired by Elevance. The groups halted the proposed sale in September in response to concerns from the state's attorney general and lawmakers called for a delay. 

In a statement shared with Becker's, an Elevance Health spokesperson said the company is supportive of BCBS Louisiana's decision to withdraw its plan of reorganization. 

"We will continue to meaningfully engage community members who are truly interested in better health outcomes and more affordable healthcare," the spokesperson said. "We remain committed to this partnership and will work with BCBSLA on next steps in bringing that to reality."

Elevance Health operates Blue Cross Blue Shield affiliates in 14 states. BCBS Louisiana would be its first BCBS acquisition in almost 20 years. It planned to pay $2.5 billion to acquire the insurer, which has 1.9 million members. 

The deal, first announced in January 2023, faced growing opposition from lawmakers and the public. The  Louisiana State Medical Society urged patients to vote against the deal, and the Louisiana State Hospital Association also opposed the sale. 

In a Feb. 8 letter to state Insurance Commissioner Tim Temple, members of the Louisiana Senate's Health and Welfare Committee and Insurance Committee raised 30 concerns regarding the sale, including about civil and federal litigation Elevance Health is involved in and the company's rates of claims denials. Senators also raised concerns that BCBS Louisiana was not providing policyholders with unbiased information to vote on the deal. 

Under the proposal, 9 percent of the sale's proceeds would be paid out to policyholders, and the rest would go to establish a foundation to promote health equity in Louisiana. The companies proposed adding more state oversight to the foundation to appease regulators, but some lawmakers questioned Louisiana Gov. Jeff Landry's role in oversight of the foundation, according to nola.com. 

"From the beginning, we recognized that any transaction such as this would be disruptive to the healthcare landscape of the state," Mr. Landry said in a Feb. 14 statement on X. "We appreciated the cooperation we received from both parties, our Commissioner of Insurance, and the legislature in both asking the tough questions, looking for solutions, and providing the answers so that the policyholders could make an informed decision and the state would be prepared if such a transaction occurred." 

Becker's has reached out to BCBS Louisiana and will update this article if more information becomes available. 

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