United States District Court, N.D. Alabama, Southern Division
IN RE BLUE CROSS BLUE SHIELD ANTITRUST LITIGATION
DAVID PROCTOR UNITED STATES DISTRICT JUDGE.
case is before the court on Provider Plaintiffs' Motion
for Partial Summary Judgment Regarding Issues Decided in
United States v. Anthem. (Doc. # 1392). In this
summary judgment motion, Provider Plaintiffs seek judgment as
a matter of law against Defendant Anthem, Inc. as to fifteen
facts that concern (1) the relationship between the Blue
Cross Blue Shield Plans and the Blue Cross Blue Shield
Association (the “Association”), (2) the
appropriate market definitions for an antitrust analysis, (3)
factors that may be considered in determining market
concentration, and (4) factors that may be considered in
determining anticompetitive effects. (Doc. # 1392 at 5,
9-10). The motion has been fully briefed (see Docs.
# 1481, 1482, 1569), and the court held oral argument on this
motion on October 4, 2017. (See Doc. # 1607). At the
Special Master's request, the court held the motion
during the pendency of the parties' mediation sessions.
The motion is now ripe for decision. After careful review,
and for the reasons explained below, the court concludes that
Provider Plaintiffs' motion (Doc. # 1392) is due to be
2016, the United States, eleven states, and the District of
Columbia (collectively referred to as the “United
States”) sued to enjoin a proposed merger between
Anthem and Cigna Health and Life Insurance Company
(“Cigna”). United States v. Anthem,
Inc., 236 F.Supp.3d 171, 186 (D.D.C.),
aff'd, 855 F.3d 345 (D.C. Cir. 2017)
(“Anthem I”). The United States sought
to enjoin the proposed Anthem-Cigna merger under Section 7 of
the Clayton Act because the merger would “harm
competition in the sale of commercial healthcare” to
national accounts and large group employers. Id. at
186-87. The Anthem I bench trial began in November
2016 and ended in January 2017. Id. at 187.
D.C. District analyzed the proposed Anthem-Cigna merger under
a three-part test provided in United States v. Baker
Hughes, Inc., 908 F.2d 981 (D.C. Cir. 1990). Anthem
I, 236 F.Supp.3d at 191-92. Ultimately, the court
concluded that (1) the United States had established a prima
facie case of a presumptively anticompetitive merger, (2)
Anthem and Cigna had introduced evidence to rebut the
presumption, and (3) the United States had ultimately showed
that the effect of the merger would be to lessen competition
“in the market for sales to national accounts within [
] fourteen states.” Id. at 192. First, the
district court applied the Baker Hughes test to
analyze the effect of the proposed merger on the market for
sale of health insurance to national accounts within the
fourteen states where Anthem holds a Blue license. See
Id. at 193-253. Second, the district court addressed the
effect of the proposed merger on the sale of health insurance
to large group employer accounts in the Richmond, Virginia
Core-Based Statistical Area (“CBSA”).
Id. at 253-59. The district court enjoined the
proposed Anthem-Cigna merger because of its effect on
competition in the national account market and its
effect on competition in the Richmond large group market.
Id. at 259.
sought an expedited appeal in the D.C. Circuit Court of
Appeals. (Doc. # 1482-1 at 3-12). The D.C. Circuit agreed to
hear the appeal on an expedited basis. (United States v.
Anthem, Inc., Case No. 17-5024, Doc. # 1662008 (D.C.
Cir. Feb. 17, 2017)). Anthem challenged the district
court's judgment “on the principal ground that the
court improperly declined to consider the claimed billions of
dollars in medical savings.” United States v.
Anthem, Inc., 855 F.3d 345, 348 (D.C. Cir.),
petition for cert. dismissed, 137 S.Ct. 2250 (2017)
(“Anthem II”). In April 2017, the D.C.
Circuit affirmed both grounds for the district court's
injunction of the proposed Anthem-Cigna merger. See
Anthem II, 855 F.3d at 349, 364 (affirming the district
court's national-account market ruling); id. at
349, 368 (affirming the district court's ruling with
regard to Richmond's large-group market). Anthem filed a
petition for writ of certiorari with the Supreme
Court, but withdrew that petition in June 2017. Anthem,
Inc. v. United States, 137 S.Ct. 2250 (2017).
thereafter, in August 2017, Provider Plaintiffs asked the
court to enter partial summary judgment on collateral
estoppel grounds, finding the following fifteen facts to be
undisputed for purposes of Plaintiff's claims against
1. “No two Blue companies will ever bid on the same
large group or national account, and no Blue licensee may bid
on an account headquartered in another licensee's state
without receiving a ‘cede' from that
carrier.” [Anthem I, 236 F.Supp.3d at 189].
2. “Access to a network of medical care providers is an
essential component of any commercial health insurance
plan….Anthem gains access to a national network for
its customers by virtue of its membership in the Blue Cross
Blue Shield Association.” [Anthem I, 236
F.Supp.3d at 189].
3. “There are important aspects of Blue Cross Blue
Shield Association membership-in particular, the mutuality
and cooperation involved in the cedes, the potential for Blue
Card revenue, and the best efforts rules-that redound to the
benefit of the Association as a whole.” [Anthem
I, 236 F.Supp.3d at 220 n. 22].
4. “Like all other members of the Blue Cross Blue
Shield Association, Anthem receives Blue Card fees for
network access and administrative services when it
‘hosts' a member of another Blue plan.”
[Anthem I, 236 F.Supp.3d at 189].
5. The “market for the sale of health insurance to
‘national accounts' - customers with more than 5000
employees, usually spread over at least two states” is
a relevant product market. [Anthem I, 236 F.Supp.3d
at 179, 193-202].
6. The market for national accounts includes both insured and
Administrative Service Only (ASO) business. [Anthem
I, 236 F.Supp.3d at 201].
7. The Association rules are significant to the determination
of the relevant geographic market for the sale of medical
coverage to National Accounts. [Anthe ...