The climate for payer mergers and acquisitions (M&A) has cooled substantially at a national level ever since the collapse of the proposed deals between Anthem, Inc. and Cigna Corp. and between Aetna Inc. and Humana Inc., and experts say transactions of that scale and type are unlikely to return. However, consolidation in the provider sector has increased since the start of the COVID-19 pandemic as such firms grapple with the rapid collapse of fee-for-service revenue — and experts say that cash-rich payers may start to expand their businesses into areas including care delivery, technology and retail. Unlike Aetna and Humana, which amicably ended their deal after losing an antitrust challenge brought by the Dept. of Justice, the breakdown of Anthem’s bid to acquire Cigna got ugly — resulting in a public spat and dueling lawsuits over Cigna’s attempt to exit their agreement before exhausting the firms’ option to appeal a federal ruling against the transaction.
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