Justice OKs Pa. Blues merger

The Federal Trade Commission and the Dept. of Justice have given the thumbs-up to a merger that would create the largest nonprofit Blue Cross Blue Shield company in the nation.

The departments granted an early termination to a 30-day waiting period for review because, according to statements from Pittsburgh-based Highmark and Philadelphia-based Independence Blue Cross, the merger complied with all rules, and they decided not to take any enforcement action against the merger. While not technically an approval of the deal, the move indicates that federal authorities will grant permission for it to take place.

The Pennsylvania Medical Society responded that this means attention regarding the deal, which will create a company insuring more than half of all Pennsylvanians, will be concentrated at the state level. The Pennsylvania attorney general must approve the deal before it can take place.

The society has not yet come out against the deal, saying it wanted to do more research before determining if the deal violated policy "to oppose all health insurance mergers unless it would benefit patient care." On April 9, C. Richard Schott, MD, vice chair of the medical society's board of trustees, testified to the U.S. Senate Committee on the Judiciary, "We hope that regulators and others will not rush this merger marriage down the aisle until we can ensure it will do no harm to the public."

The Pennsylvania House and Senate have approved a bill that would give the state's insurance department authority to review the Highmark-Independence merger -- authority it currently does not have because it does not review mergers between nonprofit holding companies. But Gov. Ed Rendell has threatened to veto the bill because it includes the formation of an advisory committee, appointed by the legislative and executive branches, to the insurance department.

Note: This item originally appeared at http://www.ama-assn.org/amednews/2007/06/18/bibf0618.htm.