The Blue Cross and Blue Shield of Louisiana headquarters building is seen Jan. 23, 2023 in Baton Rouge.
Dr. I. Steven Udvarhelyi, President and Chief Executive Officer of BCBSLA, listens to a question during the state senate committee on Blue Cross Blue Shield Louisiana on Monday, February 5, 2024 at the state capitol building in Baton Rouge, Louisiana.
Tim Barfield, representing Accelerate Louisiana, talks about the foundation being set up during the state senate committee on Blue Cross Blue Shield Louisiana on Monday, February 5, 2024 at the state capitol building in Baton Rouge, Louisiana.
State senator Royce Duplessis, D-New Orleans, listens to Louisiana Department of Insurance Executive Counsel David Caldwell speak during the state senate committee on Blue Cross Blue Shield Louisiana on Monday, February 5, 2024 at the state capitol building in Baton Rouge, Louisiana.
The Blue Cross and Blue Shield of Louisiana headquarters building is seen Jan. 23, 2023 in Baton Rouge.
Tim Barfield, representing Accelerate Louisiana, talks about the foundation being set up during the state senate committee on Blue Cross Blue Shield Louisiana on Monday, February 5, 2024 at the state capitol building in Baton Rouge, Louisiana.
State senator Royce Duplessis, D-New Orleans, listens to Louisiana Department of Insurance Executive Counsel David Caldwell speak during the state senate committee on Blue Cross Blue Shield Louisiana on Monday, February 5, 2024 at the state capitol building in Baton Rouge, Louisiana.
For the second time in less than a year, Baton Rouge-based Blue Cross and Blue Shield of Louisiana has shelved its plans for a controversial $2.5 billion sale to Elevance Health, throwing into question the future of what would have been the largest health care deal in state history.
Blue Cross officials decided to table the deal late Tuesday night, less than 12 hours before state insurance regulators were set to begin a two-day hearing to determine the fate of the sale, which would affect some 1.9 million Blue Cross customers across Louisiana.
In recent weeks, opposition to the deal had grown from doctors and hospitals, some policyholders, state lawmakers and good government groups. On Mardi Gras, Louisiana Attorney General Liz Murrill, whose office opened an investigation into the deal last summer under her predecessor, Gov. Jeff Landry, became the latest public official to voice concerns. In a letter to Insurance Commissioner Tim Temple, Murrill questioned the deal’s potential impact on customer insurance premiums and Louisiana residents more broadly.
Early Wednesday, Temple announced the hearing was canceled.
“There are serious questions that require answers to provide protections and safeguards for Louisiana ratepayers and providers,” Temple said in a prepared statement. “The withdrawal of the application forecloses further consideration of this matter.”
For months, Blue Cross officials have argued that the deal is the best way to navigate a health care industry facing rapid change. Critics have raised concerns with how the deal is structured, the track record of Elevance in other states and the political considerations made in a $3 billion foundation that would have resulted from the sale.
Dr. I. Steven Udvarhelyi, President and Chief Executive Officer of BCBSLA, listens to a question during the state senate committee on Blue Cross Blue Shield Louisiana on Monday, February 5, 2024 at the state capitol building in Baton Rouge, Louisiana.
Blue Cross and Elevance issued separate statements Wednesday indicating the deal remains alive, though they did not say what a revised plan might look like, when they might try again or if current Blue Cross CEO Dr. Steve Udvarhelyi, the mastermind behind the deal — and its public face for the past 13 months — would again lead the charge.
“It is clear that our stakeholders need more time and information to understand the benefits of the changes we have proposed,” Blue Cross said. “This is why we have decided to again pause the process in our proposed transaction with Elevance Health.”
Elevance said it remains committed to the deal.
“We will continue to meaningfully engage community members who are truly interested in better health outcomes and more affordable health care,” Elevance officials said. “We remain committed to this partnership.”
Blue Cross, which has operated in the state since 1934, initially announced the proposed sale to Elevance in January 2023. At the time, and ever since, Blue Cross officials have said that while the insurer is financially strong now, it needs to sell to a larger company to better compete in the future.
Indiana-based Elevance is one of the nation’s largest insurers, operating Blue Cross plans in 14 other states. The company has its own telehealth platforms, specialty doctors’ practices and a pharmacy benefits manager, which Blue Cross said would enable it to provide better services to Louisiana customers.
Critics haven’t bought that argument. Instead, the debate over the acquisition, in legislative hearings and in public letters, has focused on other issues, including political involvement in the nonprofit set to result from the transaction and Elevance’s track record running Blue Cross plans in other states.
Some state lawmakers on Wednesday trumpeted the news that Department of Insurance hearing was canceled. Earlier this month, they grilled company executives in a nearly eight-hour hearing and followed up with a seven-page report that said “there is nothing redeemable” about the deal.
Murrill said in her letter to Temple Tuesday that she had reviewed the legislative report and “my takeaway from the hearing is one of concern.” Murrill questioned whether the sale is in the best interest of Blue Cross policyholders, suggested the company’s proxy voting process could have violated state law and raised the issue of Elevance’s record in other states.
She also took issue with aspects of the proposed foundation.
Stakeholders who have been watching the controversy unfold for months had differing takes Wednesday on whether Blue Cross will come back with a another revised plan. San Diego-based health care consultant Nate Kauffman, who was not involved in the sale, said there was a “reasonably good chance” Elevance would try again.
“Their scale and administrative costs are so much lower than Blue Cross’s, it is likely they will make a windfall over time by taking over that book of business,” said Kauffman.
When a revised plan might be announced isn’t clear. Also unknown is how Blue Cross leadership might be impacted by their failure to make the deal happen. Republican state Sen. Jeremy Stine of Lake Charles, one of the most outspoken critics of the deal, called on Udvarhelyi and the Blue Cross board to step down Wednesday, urging his constituents to do the same.
Blue Cross did not address the speculation about Udvahelyi’s future.
Also unclear is whether Blue Cross would be on the hook for a $75 million termination fee that is specified in its agreement with Elevance, though a Blue Cross spokesperson said both parties “are fulfilling their obligations” and so a penalty wouldn’t apply.
Email Stephanie Riegel at [email protected].
{{description}}
Email notifications are only sent once a day, and only if there are new matching items.
News Tips:
[email protected]
Other questions:
[email protected]
Need help?
Your browser is out of date and potentially vulnerable to security risks.
We recommend switching to one of the following browsers:
Blue Cross shelves plans to sell to Elevance for a second time; regulatory hearings canceled – NOLA.com
Leave a comment