By Brent Kendall

WASHINGTON -- The Justice Department and health insurer Anthem Inc. each sought to score points Tuesday when Cigna Corp. Chief Executive David Cordani took the witness stand in a trial that will determine the fate of the two companies' proposed merger.

Mr. Cordani's testimony, which came on day two of the government's legal challenge to the deal, was important for both sides, especially in light of tensions between Anthem and Cigna, which have accused each other of breaching their merger agreement.

Under Justice Department questioning, Mr. Cordani said Cigna was an innovative player in the industry that focused on patient outcomes instead of flat fees for medical services. Part of the department's case is built on the argument that the public could lose this innovation if Cigna is bought by Anthem.

Mr. Cordani also said the proposed deal was a large and complex one, and integrating the two companies would be complicated.

Anthem on Tuesday sought to stress that Cigna's innovation is one of the reasons it wants to buy the company, so it can extend new services and fresh health-care approaches to more people.

Under questioning from an Anthem lawyer, Mr. Cordani said Cigna wanted to spread its value-based approach to a larger patient population, and he said doctors and hospitals would benefit from that.

So, Anthem lawyer Christopher Curran asked, the proposed merger would accelerate these benefits? "That was the objective on day one" of the deal, Mr. Cordani responded. He didn't say if it continued to be Cigna's objective today.

Anthem has said in previous court filings it believes Cigna would walk away from the deal next year if given the chance. If the deal is blocked, Cigna could receive a $1.85 billion fee from Anthem. Anthem is trying to win the court case and close the deal before then.

Lawyers asked both Mr. Cordani and Anthem CEO Joseph R. Swedish about the companies' current relationship. But before doing so, they asked that the courtroom be closed, saying the discussion would involve confidential information.

U.S. District Judge Amy Berman Jackson granted the request and the proceedings were closed for several hours, including for much of Mr. Swedish's testimony Tuesday.

Reporters from seven news organizations, including The Wall Street Journal, sent the judge a letter around midday raising concerns about public access to the proceedings and to some evidence that had been shielded from public view.The judge addressed the letter when the courtroom reopened, saying she favored open proceedings, though she also said some business information, including information about third parties, would need to be protected in the case.

Judge Jackson ordered the insurers to submit legal filings by Monday on whether court transcripts of at least part of the closed session should be released to the public.

Write to Brent Kendall at brent.kendall@wsj.com

(END) Dow Jones Newswires

November 22, 2016 18:41 ET (23:41 GMT)

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