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Louisiana's Blue Cross division cancels $2.5 billion sale to Elevance Health amid numerous concerns

por John R. Fischer, Senior Reporter | February 20, 2024
Business Affairs
Blue Cross Blue Shield of Louisiana will not go through with its planned sale to Elevance Health.
Blue Cross Blue Shield of Louisiana has called off its $2.5 billion sale to Elevance Health, a for-profit company and one of the largest U.S. insurers, ending what would have been the biggest healthcare deal in the state’s history.

The decision followed the release of a highly critical report by the joint Senate Insurance and Health and Welfare committees, who scrutinized the deal in an all-day hearing with both organizations about its effect on insurance costs and reimbursement cuts as well as the sale’s structure, political influence in the voting process, and $26 million in regulatory violations faced by Elevance Health in other states. The Louisiana Hospital Association came out against the deal following the report’s release, reported The Times-Picayune/The New Orleans Advocate (Nola.com).

“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,” said Blue Cross in a statement.

In a statement of its own, Elevance Health told HCB News that it was "supportive of Blue Cross' decision to withdraw" from the deal and that it "remains committed to this partnership and will work with Blue Cross on next steps in bringing that to reality."

Proposed in January 2023, Blue Cross said the deal would help it adapt to and compete in a changing insurance market, and that Elevance would upgrade its technology and offer improved services. Blue Cross policyholders, which consist of nearly half of Louisiana residents, expressed concern that the deal would raise their premiums, while doctors and hospitals said they were worried about negotiating reimbursement rates with a larger company.

While the statement refers to the deal as “on pause,” anonymous sources involved with or having close knowledge of the agreement told Nola.com that it was effectively over, at least for now. If the deal is, in fact, on hold, it will be the second time, with Blue Cross and Elevance having previously put the brakes on it last summer to revise it to assuage concerns. They releasing their new version in December.

Among the issues that prevented the deal from going forward this time were:

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