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Lembo Calls On Insurance Commissioner To Recuse Herself From Merger Review

by | Jun 30, 2016 5:58pm
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Posted to: Business, Consumer Protection, Corporate Watch, Ethics, Health Care, Insurance

State Comptroller Kevin Lembo

State Comptroller Kevin Lembo added his name Thursday to a growing list of advocates and officials asking Insurance Commissioner Katharine Wade to recuse herself from reviewing the Anthem-Cigna merger.

“With each passing day I grow more concerned about both the process by which the review is being conducted and the eventual impact of the proposed merger on the State of Connecticut and its residents,” Lembo wrote in a letter to Wade.

The concerns about Wade are related to her former employer, Cigna.

Wade last worked at Cigna in 2013 as vice president Public Policy, Government Affairs and U.S. Compliance. She was also the head of the Connecticut Association of Health Plans, the lobbying group for Connecticut’s insurance plans, from 2005 to 2013. Wade’s husband still works for Cigna.

Lembo said he understands the Office of State Ethics has been asked to consider whether Wade’s involvement conflicts with the state Code of Ethics, “however a favorable ruling from the OSE will not remove public skepticism of your role in the review of the merger.”

Lembo said the “strong ties” between Wade and one of the merger applicants, “combined with the secretive nature of the proceedings, at the very least, create the appearance of a favored outcome.”

The Insurance Department pushed back:

“The Commissioner has consistently sought the guidance of the Office of State Ethics and has made it clear that she will abide by whatever guidance Ethics’ ultimately issues, even that guidance changes from what has been previously conveyed,” Donna Tommelleo, a spokeswoman for the Insurance Department, said. “What is disappointing, however, is that the Comptroller never picked up the phone to discuss the issue with the Commissioner directly and instead issued a letter and press release largely based on media reports.”

Lembo said he never received a response to a letter he wrote to Wade in April.

Lembo said the merger of the two insurance giants will have a significant impact nationally and an even greater impact in Connecticut. If the merger moves forward, Lembo wrote that concentration of Connecticut’s health insurance market will increase 44 percent using the Herfindahl-Hirschman Index.

“Only Georgia is expected to experience a more significant increase in market concentration,” Lembo wrote.

He said he’s not advocating for or against the merger, but he would like the process to be transparent and fair.

“The revelations and repeated reports about your financial, personal and professional ties to Cigna will make it challenging for the Connecticut public to view the review process of the Anthem-Cigna merger as fair and transparent if you continue to directly oversee the review,” Lembo wrote.

Connecticut’s Insurance Department is playing a lead role in regulating the review of the Anthem-Cigna merger. The merger has received regulatory clearance in 12 states. Twenty-eight states have an opportunity to review the merger.

The letter follows another sent earlier this week to the U.S. Department of Justice asking it not to approve the Anthem-Cigna and Aetna-Humana mergers.

That letter, from 43 state and national organizations, said the proposed mergers are likely to have a significant negative impact on both the cost and quality of care throughout the country, and would permanently change our nation’s healthcare system for patients, physicians, and other stakeholders. It also said the regulatory review being done at the state level has been done mostly in secret.

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