The U.S. Justice Department has questioned whether the plan of Aetna Inc. and Humana Inc. to sell some of their Medicare Advantage assets to Molina Healthcare Inc. would address competitive concerns about their pending merger, The Wall Street Journal reported Dec. 8.
During the trial of the lawsuit to block the deal between Aetna and Humana, the Justice Department said Molina's documents suggested that its own board initially had doubts about the merits of buying assets from Aetna and Humana. The department also questioned Molina's ability to preserve competition in the event of a merger between Aetna and Humana.
In a memo submitted to the Molina Healthcare board earlier in 2016, CFO John Molina said Aetna/Humana were likely to only divest underperforming assets. The CFO also questioned whether Molina Healthcare had sufficient administrative experience to take on the assets.
The executive in his Dec. 8 testimony defended Molina Healthcare's deal for Medicare Advantage assets of Aetna and Humana, saying the company would ramp up investments and boost hiring to make the deal work. He also added that the board members' initial concerns were based on incomplete information, according to the report.