The new year has just begun, but already a significant payer transaction reportedly is in the works.
Cigna is nearing a deal to sell its Medicare Advantage business to Health Care Service Corp., The Wall Street Journal reported Jan. 3. People familiar with the deal told the Journal that Cigna is in exclusive talks with HCSC to sell the MA business for between $3 billion and $4 billion.
A planned merger between Cigna and Humana fell through in December. Analysts said the sale of Cigna's Medicare Advantage business could make the deal more palatable to regulators. Cigna has continued to pursue a sale of the business despite the dissolution of the merger.
Health Care Service Corp. operates Blue Cross Blue Shield affiliates in Illinois, Texas, New Mexico, Oklahoma and Montana.
UnitedHealth Group remains busy on the mergers and acquisitions front as well. Its Optum arm — the largest employer of physicians in the U.S. — is seeking to acquire physician-owned Corvallis (Ore.) Clinic, which operates 11 clinic locations in Oregon and owns and operates its own ASC. Optum Oregon currently provides administrative and management services for Eugene-based Oregon Medical Group, Portland-based GreenField Health and Eugene-based OHR Physician Group.
UnitedHealth Group's proposed $3.3 billion acquisition of Baton Rouge, La.-based home and hospice care provider Amedisys remains pending. An overwhelming majority of Amedisys shareholders approved the deal in September, but the deal is facing scrutiny from the Justice Department, which requested additional information about the proposed merger in August and extended the waiting period for the deal under federal law. Massachusetts Sen. Elizabeth Warren and Washington Rep. Pramila Jayapal in October expressed concern in a letter to the Federal Trade Commission and the Justice Department's antitrust division that the deal would increase UnitedHealth Group's market dominance, reduce competition, hurt patients and increase healthcare costs.
Blue Cross Blue Shield of Louisiana and Elevance Health submitted a new proposal Dec. 15 to the Louisiana Department of Insurance to allow the nonprofit insurer to be bought by Elevance. The two companies halted the proposed $2.5 billion sale in September, after Louisiana's attorney general and other lawmakers expressed concerns about the deal.
Nine percent of the sale's proceeds will be distributed to BCBS Louisiana policyholders, and the remaining 91% will establish the Accelerate Louisiana Initiative, a nonprofit organization that aims to improve health equity in the state. The new proposal from Elevance and BCBS Louisiana would give the state more oversight of the foundation, allowing the governor to appoint one of the foundation's board members and adding an observer role appointed by the state's insurance commissioner.
The deal is subject to a public hearing and the deal must be approved by two-thirds of BCBS Louisiana policyholders and the insurance commissioner. The companies expect the deal to close early this year.
Elevance on Jan. 4 also announced plans to acquire Paragon Healthcare, which operates infusion centers and specialty pharmacies. If approved, the company will operate as part of CarelonRx, the pharmacy services segment in Carelon, Elevance's healthcare services arm. The deal is expected to close in the first half of the year.