> Dirigo Health Filing

The Superintendent issues this Order on the Motion to Dismiss of the Maine Automobile Dealers Association Insurance Trust and the Bankers Health Trust (collectively, the “Trusts”), dated September 26, 2005, and the Motion to Dismiss of the Maine State Chamber of Commerce (the “Chamber”), dated September 30, 2005. The Trusts move to dismiss the proceeding on the basis that: (1) the Dirigo Health Agency Board of Director’s (“Dirigo” or the “Board”) filing was untimely thereby depriving the Superintendent of jurisdiction; and (2) the Board did not provide interested parties with the opportunity for an adjudicatory hearing. Responsive filings were made on September 30th. Dirigo opposed the motion, Consumers for Affordable Health Care (“CAHC”) supported Dirigo’s opposition, Anthem Health Plans of Maine, Inc. d/b/a/ Anthem Blue Cross and Blue Shield (“Anthem”) took no position on the motion, the Maine Association of Health Plans did not make any filing, and the Chamber joined in the motion. Dirigo filed its opposition to the Chamber’s motion on October 4, 2005.

Analysis

1. Timeliness of the Dirigo Filing. The Legislature directed that “no later than the effective date of the Act, the Board shall file with the Superintendent of Insurance its determination of the aggregate measurable cost savings in this State.” P.L. 2005, ch. 400, § B-1.¹ Parroting this legislative directive, the Superintendent stated in his June 29th Notice of Pending Proceeding and Hearing that the Board’s determination “is required to be filed with the Superintendent no later than September 17, 2005.” It was not the Superintendent’s intent to create additional requirements for the filing deadline, but only to follow that set by the Legislature. Dirigo made its filing with the Superintendent on Monday, September 19, 2005, the first business day after the law’s effective date.

In establishing that the Board’s determination was to be filed by the law’s effective date, the Legislature did not set forth negative words restraining the making of the filing after such date. Nor did the Legislature use clearly expressed intent to make the filing deadline mandatory or jurisdictional. In other words, the filing provision does not mean “that it is absolutely essential that the specified action take place within the set time periods else the action can never thereafter be taken.” Bradbury Memorial Nursing Home v. Tall Pines Manor Assocs., 485 A.2d 634, 641 (Me. 1984) (emphasis added). As recognized by the Law Court: “statutory time provision not mandatory unless it both expressly requires official action within set time and specifies consequences for failure to comply.” Anderson v. Commissioner of the Dept. of Human Services, 489 A.2d 1094, 1099 (Me. 1985); citing Bradbury, 485 A.2d at 640 (quoting case omitted) (emphasis added).

Additionally, in Anderson the Law Court cited for support of its position the following from Sutherland, Statutes and Statutory Construction:

Generally, those directions which are not the essence of the thing to be done, but which are given with a view merely to the proper, orderly and prompt conduct of the business, and by the failure to obey no prejudice will occur to those whose rights are protected by the statute, are not commonly considered mandatory. Likewise, if the act is performed but not in the time or in the precise manner directed by the statute, the provision will not be considered mandatory if the purpose of the statute has been substantially complied with and no substantial rights have been jeopardized.

Anderson, 489 A.2d at 1098 (citing 1A Sutherland, Statutes and Statutory Construction § 25.03 at 300 (4th ed. C. Sands ed. 1972), and Ottman v. Fisher, 319 A.2d 56, 63 (Me. 1974)) (emphasis added). Neither the Maine Automobile Dealers Association Insurance Trust, the Bankers Health Trust, nor the Maine State Chamber of Commerce – and in fact no party – has alleged prejudice by the two-day delay in Dirigo making its filing (from Saturday, September 17th, to Monday, September 19th).

Upon consideration of the filings by the parties, the legislative enactment and history, and the relevant case law, the Superintendent finds that the provision for a filing “no later than the effective date of the Act” is directory and not mandatory or jurisdictional.

2. Compliance with Statute for Determination of Aggregate Measurable Cost Savings for the First Assessment Year. The Superintendent interprets P.L. 2005, ch. 400 as creating two different sets of requirements and processes for Dirigo’s determination of aggregate measurable cost savings – one applicable for the first assessment year (P.L. 2005, ch. 400, Pt. B) and another applicable to all subsequent assessment years (P.L. 2005, ch. 400, § A-10²).³ The bill setting forth the different requirements and processes was passed to be enacted by the Legislature on June 17, 2005 and signed into law that same day by the Governor.⁴

Immediately thereafter, by correspondence dated June 24, 2005, the Superintendent named the participants to the savings offset payments working group (the “Working Group”) in fulfillment of section B-1 of the law. P.L. 2005, ch. 400, § B-1. Following newspaper public notice, the first meeting of the Working Group was held on June 30, 2005. A specifically identified responsibility of the Working Group under the law was to make a recommendation to advise the Board on its proposed methodology for calculating aggregate measurable cost savings, with a deadline of September 20, 2005. PL. 2005, ch. 400, § B-1(3)(D). The Working Group’s recommendation was made to the Board on August 29, 2005.

In compliance with section B-2 of the law, the Board filed with the Superintendent Dirigo’s determination of aggregate measurable cost savings, upon which the Superintendent is required to conduct a public hearing. PL. 2005, ch. 400, § B-2(2). The Dirigo filing was made with the Superintendent on Monday, September 19, 2005.

The Superintendent finds that sections B-1 and B-2 of the law were satisfied. P.L. 2005, ch. 400, §§ B-1 and B-2. The remaining issue, therefore, is the applicability of and/or compliance with the “opportunity for hearing” provisions under section 6913(1). 24-A M.R.S.A. § 6913(1). Both pre-existing and amended sections 6913(1) state: “after an opportunity for a hearing . . . the board shall determine annually . . . the aggregate measurable cost savings.” Id. Without addressing whether or not Dirigo complied with the notice provisions of 5 M.R.S.A. § 9052, the Superintendent finds that the Trusts and the Chamber had constructive notice of their legal rights but failed to timely act.⁵ The Trusts never made written request for a hearing, and the Chamber waited until Tuesday, September 13, 2005 to make a written hearing request.⁶ The Superintendent finds that waiting until September 13th to request a hearing was not reasonable in light of the deadline for the recommendation by the Working Group to the Board, which was no later than Tuesday, September 20, 2005. P.L. 2005, ch. 400, § B-1(3)(D).

ORDER

By reason of the foregoing: (1) the September 26, 2005 Motion to Dismiss of the Maine Automobile Dealers Association Insurance Trust and the Bankers Health Trust is DENIED; and
(2) the September 30, 2005 Motion to Dismiss of the Maine State Chamber of Commerce is DENIED.

¹ The law became effective on Saturday, September 17, 2005.

² 24-A M.R.S.A. § 6913(1) (eff. September 17, 2005).

³ Prior to the enactment of P.L. 2005, ch. 400, the statutory language regarding the determination of aggregate measurable cost savings was identical for all assessment years, in other words there were no statutorily separate requirements and processes for the determination in the first assessment year from that to be made in subsequent assessment years. 24-A M.R.S.A. § 6913(1). Recognizing this historic status quo, however, the Legislature acted to change the law by establishing different requirements and procedures for the first assessment year. P.L. 2005, ch. 400, Pt. B.

⁴ While signed into law by the Governor on June 17, 2005, it did not become effective until ninety days thereafter on Saturday, September 17, 2005.

⁵ Although there are arguably-applicable requirements for notice with which Dirigo did not comply, none of the parties arguing that the failure to give notice should be fatal was unaware of the Dirigo process or otherwise prejudiced in any way by any failure of Dirigo to give formal notice in the manner specified in 5 M.R.S.A. § 9052.

⁶ Without resolving the issue of whether or not the opportunity for a formal adjudicatory hearing before the Board was required in the first assessment year, given the different requirements and procedures set forth by the Legislature for determining aggregate measurable cost savings for the first assessment year as compared to subsequent assessment years (i.e., recommendations to the Board by a Working Group in the first year and not thereafter, the timeframe for making the filing with the Superintendent after receipt of the Working Group recommendation, etc.), the Superintendent questions whether the Legislature intended the Board to conduct a formal adjudicatory hearing in the first assessment year.

PER ORDER OF THE SUPERINTENDENT

> Dirigo Health Filing