Elevance CEO 'remains confident' in closing deal for Blue Cross of Louisiana

Elevance Health, the insurance giant negotiating to purchase Blue Cross and Blue Shield of Louisiana, remains committed to the $2.5 billion deal despite recent delays in getting regulatory approval, Elevance CEO Gayle Boudreaux said Wednesday.

“We remain confident in our ability to close the acquisition,” said Boudreaux, who added during a conference call to discuss its quarterly earnings that the company is "actively working with state regulators and local stakeholders,” to address concerns about the deal.

Baton Rouge-based Blue Cross officials notified the Louisiana Department of Insurance in late September it was withdrawing its application for the necessary state approval of the deal. The pause came amid growing concerns from policyholders, local politicians and Louisiana Attorney General Jeff Landry, who is now governor-elect.

At the time, the company said it would refile its application with the state later this year or in early 2024.

Landry had expressed concerns about whether the deal was in the best interest of the policyholders and had said he thought the incoming Commissioner of Insurance, Tim Temple, a new governor and a new crop of state legislators should be in office before a deal of such magnitude is approved.

More than 1.9 million people in Louisiana have some form of Blue Cross health insurance. Of those, some 92,000 are policyholders.

The Louisiana Department of Insurance and two-thirds of Blue Cross policyholders must approve the deal.

Elevance is a nearly $110 billion publicly traded company based in Indianapolis. In its earnings call Wednesday, Boudreaux and others touted the company’s third-quarter performance, which saw revenues increase more than 7% year over year.

Company executives also discussed steps they will take to address recently released ratings the company received from federal regulators over the quality of its Medicare Advantage and Prescription Drug Plan for seniors. Ratings for those plans are released annually from the Center for Medicare and Medicaid Services and reflect the experiences of people enrolled in the plans.

CMS rates the plans on a scale of one to five, with five representing the highest level of performance. In the most recent rankings, published last week, three of Elevance’s largest Medicare Advantage contracts fell from a 4.5-star rating to a 3.5-star rating.

In the call, Boudreaux said the company was "disappointed" with its performance on certain metrics, especially declines in member's reported satisfaction with access to appointments and care.

Elevance is "exploring all options" to mitigate effects from the ratings, which will affect Elevance revenues, as fewer stars result in a decline in bonus payments from the federal government.