Suit reveals Aetna-Wellpoint merger talks

The California insurer sues Aetna over its hiring of a WellPoint executive and in the process acknowledges that the plans had been discussing consolidation.

By Myrle Croasdale, AMNews staff. Sept. 24, 2001.

The lawsuit WellPoint Health Networks Inc. is bringing against rival Aetna Inc. highlights the serious competition taking place as insurers fight to survive in a consolidating market, and, doctors groups' say, ignore their needs in the process.

"I wish they'd spend as much time and energy engaged with physicians and clients in health care as they are suing each other over competitive advantages," said Bill Clark, acting general counsel for the Medical Assn. of Georgia. WellPoint recently moved into that state as the new owner of Blue Cross and Blue Shield of Georgia.

"Sounds like another sideshow to watch," said Paul Kitchen, executive vice president of the Medical Society of Virginia, a state where WellPoint operates as Unicare and Aetna is a major health care insurer.

WellPoint's lawsuit, filed Aug. 24 in the U.S. District Court in New York, grew out of discussions of a merger between the Thousand Oaks, Calif.-based company and Hartford, Conn.-based Aetna. The discussion, in August 2000, had not been publicly disclosed prior to the lawsuit and followed a previous attempt by WellPoint and ING Group NV to take over Aetna in February 2000.

On Aug. 11, 2000, according to the lawsuit, WellPoint and Aetna signed a one-year deal related to talks they had that day regarding their possible alliance. Part of the deal, WellPoint said, was that neither company was allowed to hire the other's executives during that time.

WellPoint's complaint states that in March 2001 Aetna hired Ronald Williams, group president of the large-group division of WellPoint and president of WellPoint's Blue Cross of California company. That move, WellPoint said, was in violation of their agreement, even though the companies had not talked since that Aug. 11, 2000, meeting. [...]