Document 178 : Docket No. 99-14 : Hearing Decision : Bureau of Insurance

STATE OF MAINE

DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION

BUREAU OF INSURANCE

IN RE:	)
APPLICATION OF ASSOCIATED	)
HOSPITAL SERVICE OF MAINE	)
d/b/a BLUE CROSS AND BLUE	)
SHIELD OF MAINE TO CONVERT	)
TO A STOCK INSURER AND	)
VOLUNTARILY LIQUIDATE	)
AND DISSOLVE	)
	)
and	)
	)	ORDER REQUIRING ANTHEM
IN RE:	)	HEALTH PLAN OF MAINE, INC.
APPLICATION OF ANTHEM	)	TO SATISFY THE REQUIREMENTS
HEALTH PLAN OF MAINE, INC.	)	OF 24-A M.R.S.A. §§ 4203-4204
TO ACQUIRE THE ASSETS OF	)
ASSOCIATED HOSPITAL	)
SERVICE OF MAINE d/b/a	)
BLUE CROSS AND BLUE SHIELD	)
OF MAINE AND RELATED	)
TRANSACTIONS	)
	)
Docket No. INS-99-14	)
(Consolidated)	)

At the request of the Superintendent of Insurance ("Superintendent"), Applicants’ and the Attorney General filed position papers on the issue of whether or not Anthem Health Plan of Maine, Inc., a Maine domestic health insurer to be formed by Anthem Insurance Companies, Inc. ("Anthem") is required to apply for a certificate of authority in order to operate a health maintenance organization ("HMO") as a line of business. The requirements for obtaining a certificate of authority to operate an HMO generally appear at 24-A M.R.S.A. §§ 4203-4204.

The Superintendent agrees with the Attorney General that Section 4203 requires Applicants to comply with the requirements of Sections 4203-4204 in order to operate an HMO as a line of business. The question of whether or not a certificate of authority separate from that issued under 24-A M.R.S.A. §§ 413-414 is required is almost immaterial provided some evidence exists of the Applicants compliance with all requirements under the HMO law. In other words whether a separate certificate of authority or one certificate of authority identifying all lines of authority is issued is less important than what the Applicants must do in order to be granted authority to operate an HMO line of business.

It is clear that the general statutory provisions relating to the application for, and issuance of, a certificate of authority do not include HMO authority whether direct authority or as a line of business. The standards that must be met in order to engage in HMO activities, as opposed to more general life and health transactions are vastly different. The need to assure the Superintendent of the adequacy of provider networks, appropriate appeal procedures and the like supports the conclusion that the Legislature intended to require Applicants seeking to operate an HMO as a line of business to establish compliance with the standards of the HMO law prior to the issuance of the authority to operate an HMO.

It is equally evident that the Applicants have filed a great deal of information, some of which may assist the Superintendent in determining compliance with 24-A M.R.S.A. §§ 4203-4204. The Superintendent has no intention of requiring the Applicants to file a separate HMO application that may duplicate information that has already been filed. Rather, the Applicants must make a filing that does the following:

Cites the standard to be met;

Identifies how that standard has been or will be complied with by the Applicants; and

Identifies with specificity, if applicable, where in the current materials on file information demonstrating compliance exists.

The Applicants should be aware that one of the requirements that must be met is the filing of a copy of the application on file along with the supplemental HMO information with the Commissioner of the Department of Human Services ("Commissioner"). It is incumbent upon the Applicants to show that the Commissioner has determined whether a certificate of need is required. If no certificate of need is required, the Applicants must assure the provision of a certification from the Commissioner evidencing compliance with 24-A M.R.S.A. § 4204(2-A)(B).

The Superintendent finds that no benefit will be gained from issuing two separate certificates of authority, should the Applicants comply with all requirements. Rather, as is the case with multiple line insurers, one certificate of authority would be issued granting authority as a life, health and annuity insurer as well as granting authority to operate an HMO line of business pursuant to Chapter 56 (the HMO Act). The practical conclusion that only one piece of paper evidencing multiple lines of authority should be issued in no way reflects upon the obligation of the Applicants to comply with all substantive requirements of 24-A M.R.S.A. §§ 4203-4204.

PER ORDER OF THE SUPERINTENDENT

DATED: __________________________                         _________________________________
                                                                                            ALESSANDRO A. IUPPA
                                                                                            Superintendent of Insurance