Blue Cross Blue Shield Association may issue Anthem a nearly $3 billion fine if Anthem does not derive most of its nationwide revenue from Blue-branded projects following its Cigna acquisition, an Anthem executive said during the antitrust trial, Bloomberg reported.
Here are four things to know:
1. While being questioned by a Department of Justice lawyer, Steve Schlegel, Anthem's vice president for corporate development, said the company would need to rebrand 23 percent of Cigna's domestic revenue to comply with BCBS rules.
2. Last week, Morgan Kendrick, Anthem's president of national accounts, said Cigna will give Anthem a means to compete against Blue Cross & Blue Shield Association plans throughout the United States. Anthem is a member of BCBS and therefore cannot currently vie for business against BCBS. However, if the acquisition comes to fruition, Anthem plans to use Cigna to "aggressively compete."
3. Mr. Schlegel testified Anthem would have 120 days to propose a plan to BCBS to return it to compliance should Anthem's acquisition of Cigna come to pass. Anthem would have two years to implement the program to regain compliance if BCBS approves the plan.
4. Mr. Schlegel said Anthem doesn't need to "rebrand everything" to meet BCBS' two-thirds Blues-product requirement. Rather, Anthem would likely encourage its customers to move voluntarily.