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Maine.gov > PFR Home > Insurance Regulation > Hearing Decision Index > Document 22 : INS 99-14 : Hearing Decision
STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF INSURANCE
CENTRAL MAINE HEALTHCARE CORPORATION
APPLICATION TO INTERVENE
Pending before the Superintendent of Insurance (the "Superintendent") is an application filed by Associated Hospital Service of Maine, d/b/a Blue Cross and Blue Shield of Maine ("BCBSME") seeking the Superintendent's approval of (i) the conversion of BCBSME to a domestic stock insurer; (ii) the voluntary liquidation and dissolution of BCBSME; and (iii) the reinsurance of BCBSME's business in force with Anthem Health Plan of Maine, Inc., d/b/a Anthem Blue Cross and Blue Shield of Maine ("Anthem BCBSME"), a subsidiary of Anthem Insurance Companies, Inc. ("Anthem"), and an application filed by Anthem and/or Anthem BCBSME seeking the Superintendent's approval of (i) the establishment of Anthem BCBSME as a Maine domestic stock health insurer and the issuance to it of a Certificate of Authority; and (ii) the acquisition by Anthem, through Anthem BCBSME, of the business and assets of BCBSME. Pursuant to 5 M.R.S.A. §9054(1) and Bureau of Insurance Rule 350 § 9 (A)(1), Central Maine Healthcare Corporation ("CMHC") requests that the Superintendent issue an order allowing CMHC to intervene as of right as a full party to the proceeding (the "Proceeding") involving the foregoing applications filed by BCBSME, Anthem, and Anthem BCBSME which have been consolidated under Docket No. INS 99-14. In the alternative, CMHC requests that the Superintendent issue an order permitting it to intervene as an interested person to and to participate as a full party in such Proceeding under 5 M.R.S.A. § 9054(2). As shown below, CMHC is or may be substantially and directly affected by the Proceeding and has an interest in the Proceeding.
CMHC Is or May Be Substantially and Directly Affected by the Proceeding
and Has an Interest in the Proceeding
CMHC is or may be substantially and directly affected by the Proceeding and has an interest in the Proceeding because the outcome of the Proceeding generally, and the approval by the Superintendent of the applications of Anthem, Anthem BCBSME and BCBSME specifically, will substantially and directly affect CMHC's interest in Central Maine Partners Health Plan, Inc. ("CMPHP"), a health maintenance organization which is jointly owned and operated by CMHC and BCBSME. Currently, CMHC and BCBSME each hold fifty percent (50%) of the outstanding stock of CMPHP. CMHC's interest in CMPHP would be substantially and directly affected by the Superintendent's approval of the applications of Anthem, Anthem BCBSME and BCBSME as follows:
The Superintendent's approval of the applications of Anthem, Anthem BCBSME, and BCBSME will result in the transfer of BCBSME's stock in CMPHP to Anthem BCBSME unless CMHC elects to exercise its right to purchase BCBSME's stock in CMPHP. Such a change in the ownership of CMPHP would substantially and directly affect the governance of CMPHP. As a holder of fifty percent (50%) of the stock of CMPHP, Anthem BCBSME would have significant influence over the governance and operation of CMPHP through shareholder voting rights and the election of directors. However, Anthem and Anthem BCBSME have not expressed their intentions with respect to the operation of CMPHP, and their level of commitment to the ongoing viability of CMPHP and its current operational goals is unknown. A transfer of ownership of BCBSME's stock in CMPHP from BCBSME to Anthem BCBSME would therefore substantially and directly affect CMHC in its capacity as a fifty percent (50%) owner of CMPHP.
In addition, the value and stability of CMPHP, and thereby the value of CMHC's stock in CMPHP, is highly dependent on the contractual and other relationships CMPHP has with its owners CMHC and BCBSME. CMPHP currently has a contract with BCBSME pursuant to which BCBSME provides substantial administrative and managerial services to CMPHP. If the Superintendent approves the applications of Anthem, Anthem BCBSME and BCBSME, and Anthem BCBSME acquires and takes over the operations of BCBSME, decisions will have to be made regarding the continuation of the arrangement for the provision of administrative and managerial services with Anthem BCBSME or another entity. Such a change in the provision of administrative and management services to CMPHP would substantially and directly affect the administration and management of CMPHP and thereby substantially and directly affect CMHC in its capacity as a fifty percent (50%) owner of CMPHP.
For the foregoing reasons, CMHC is or may be substantially and directly affected by the Proceeding and has a substantial interest in it. Allowing CMHC to intervene as a party to the Proceeding is the only way to assure that CMHC's interests are protected and to afford CMHC access to necessary information to assess whether the proposed transaction will be favorable or unfavorable to CMPHP's long term interests and viability. Accordingly, CMHC requests that the Superintendent issue an order allowing CMHC to intervene as of right as a full party to the Proceeding pursuant to 5 M.R.S.A. § 9054(1) or, in the alternative, allowing CMHC to intervene as an interested party and to participate as a full party to the Proceeding pursuant to 5 M.R.S.A. § 9054(2).
Dated: October 27, 1999. Respectfully Submitted,
CENTRAL MAINE HEALTHCARE CORPORATION
Michele M. Garvin, Esq.
John C. Kane, Jr., Esq.
Attorneys for Central Maine Healthcare Corporation
ROPES & GRAY
One International Place
Boston, MA 02110
Last Updated: August 22, 2012
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