The Second Opinion

How IBT’s reporting is driving a controversy over a major healthcare merger in Connecticut

July 7, 2016

Late last week, there was some notable news in the arcane world of insurance regulation: Connecticut’s state comptroller, Kevin Lembo, called on Insurance Department Commissioner Katharine Wade to recuse herself from a review of the proposed merger of the nation’s second- and fourth-largest insurers, Anthem and Cigna, in which the state has a lead role. “The revelations and repeated reports about your financial, personal and professional ties to Cigna,” Lembo wrote to Wade, “will make it challenging for the Connecticut public to view the review process of the Anthem-Cigna merger as fair and transparent.”

Lembo’s letter marked the latest turn in a controversy that, while building for more than a year, has come to a head over the past month–driven in substantial part by the ongoing reporting of David Sirota, the Denver-based senior investigations editor for the International Business Times. On June 1, Sirota published a lengthy piece weaving together previously-known and new concerns over conflicts of interest surrounding the merger review: Wade, appointed to her role in 2015 by Connecticut Gov. Dannel Malloy, is a former longtime Cigna lobbyist, her husband is a top Cigna lawyer, her father-in-law works for a law firm that lobbies for Cigna, and her mother worked for Cigna as recently as 2013. Wade’s brother, Sirota reported, also “previously worked as a counsel” for Cigna. Further, after reviewing more than a decade’s worth of campaign finance data, Sirota showed that Anthem, Cigna, and Cigna’s lobbying firm gave more than $2 million to groups linked to Gov. Malloy, with much of that money coming since 2015.

Since then, Sirota has produced more than a dozen follow-ups on the topic—tracking, for example, grassroots groups and state legislators calling on Malloy to remove Wade from the merger review—as what he initially envisioned as a “good little blog item” turned into an investigative series.

“There’s a lot of focus on Washington accountability on the part of journalists,” Sirota said, in explaining why he submitted the FOIA request that kicked off his reporting, “but comparatively little on state officials who have a huge amount of power and get little public scrutiny.”

The underlying proposal is part of an important ongoing trend in US healthcare: Insurers–like the hospital and provider systems they negotiate with–are trying to get bigger, seeking economies of scale and more bargaining power. Anthem and Cigna argue that the deal will allow them to offer more value to customers, but it’s the job of regulators to make sure that a merger preserves competition for consumers.

Some of that regulation is done by the US Department of Justice–which, The Wall Street Journal has reported, is concerned about the merger. Connecticut has an important oversight role too, as Cigna’s home state. And news outlets in the state have covered the story as it has unspooled over the past 16 months—from Wade’s appointment and her Cigna ties to her refusal to recuse herself from the merger review. The Connecticut Mirror this week offered a solid look at the role Connecticut’s ethics laws have played in this controversy and, in May, reported that another controversial merger, between Aetna and Humana, had been approved by state regulators without any public notice in January. Ana Radelat,* who wrote the May Mirror piece, said Sirota’s June 1 article had been an important story, adding that with these mergers, “there’s a lot at stake not only in Connecticut but across the nation.”

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In the estimation of Jill Zorn, senior policy officer for the Universal Health Care Foundation of Connecticut, Sirota’s reporting “has upped everyone’s game.”

The foundation is itself a skeptic of the merger, and of consolidation in general: In March, the organization, along with another advocacy group and the Connecticut State Medical Society, announced a campaign to seek greater public input and include consumer safeguards in any merger approval; more recently, it launched a petition calling for Malloy to ask Wade to resign. Other groups have applied pressure, too. On June 13, Common Cause petitioned the Office of State Ethics to issue a ruling on whether Wade could oversee the merger review, leading to a formal inquiry.

Sirota has followed these developments, and his own work has been cited in the state’s media, like a June 7 Hartford Courant editorial questioning Wade’s judgment (“maybe it wasn’t the best idea to hire a Cigna lobbyist to regulate Connecticut’s insurance industry”) and a June 15 editorial in the Norwich Bulletin (the merger is “simply too big a regulatory matter to be left in the hands of anyone whom the public cannot trust to act independently”). It has also been referenced by state legislators from both parties calling for Wade’s recusal, the Hartford Courant reported.

The Malloy administration, too, has publicly commented on Sirota’s reporting. In late June, in response to a local public radio segment spotlighting Sirota’s work, the governor’s office issued a lengthy statement questioning Sirota’s objectivity. Dayan Candappa, global editor-in-chief of IB Times, responded to “stand by our reporting as accurate and impartial.” Malloy’s press office did not respond to inquiries from CJR seeking further details about its complaints.

Candappa told me IBT is committed to telling all sides of this story, and has repeatedly sent invitations to Anthem and Cigna to discuss their positions. So far, he said, they haven’t responded. “We have a standing request to Gov. Malloy to sit down with us for an interview or write an op-ed,” Candappa said. As for Sirota, Candappa said, “I told him to stay on the story. He has created a pack of coverage around this, and I want him to continue leading that pack.”

That may be tougher going forward. Last week, IBT laid off half of its newsroom, including at least one reporter who worked the money-in-politics beat with Sirota. “This day is awful,” Sirota tweeted. “I’ve never felt more proud of the impact of our accountability journalism & yet more crappy [about] the state of journalism.”

*Correction: This piece initially misspelled Ana Radelat’s name. CJR regrets the error.

Trudy Lieberman is a longtime contributing editor to the Columbia Journalism Review. She is the lead writer for CJR's Covering the Health Care Fight. She also blogs for Health News Review and the Center for Health Journalism. Follow her on Twitter @Trudy_Lieberman.