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	) ) ) ) ) ) ) )
IN RE: APPLICATION OF ANTHEM HEALTH PLAN OF MAINE, INC., 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)	) ) ) ) ) ) ) ) ) ) )	APPLICANTS’ FIRST DISCOVERY REQUEST TO MAINE MEDICAL ASSOCIATION       February 4, 2000

 

NOW COME Applicants and, pursuant to Ch. 350 Rules Of Practice And Procedure Governing Adjudicatory Proceedings, Rule 10(B) and the Superintendent’s November 4, 1999 Procedural Order, and requests that Maine Medical Association, Thomas Hayward, and Maroulla Gleaton (collectively "MMA") produce the requested documents and/or respond to the following requests within 14 days at the law offices of Pierce Atwood, One Monument Square, Portland, Maine, 04101.

DEFINITIONS AND INSTRUCTIONS

1. "Document" shall include all original writings of any nature, and all nonidentical copies thereof, in the possession, custody or control of Maine Medical Association, Thomas Hayward, or Maroulla Gleaton, regardless of where located, and includes without limitation, correspondence; memoranda; communications; reports; studies; summaries; minutes; notes of any kind; agenda; bulletins; notices; announcements; instructions; charts; manuals; brochures; schedules; price lists; telegrams; facsimiles; drawings; contracts; agreements; records; tape recordings; information on computers, disks, or magnetic, electronic or optic storage media; and any other documents within the meaning of Rule 34 of the Maine Rules of Civil Procedure. In all cases where original and/or nonidentical copies are not available, "documents" also means identical copies of original documents and copies of nonidentical copies.
2. With respect to any documents not produced on the basis of claim of privilege, identify each such document and the type of privilege claimed, setting forth sufficient facts relating to the nature of each such document to establish that it is within the scope of the privilege.
3. This Request for Informational Request is and should be considered a continuing request for the documents and information identified herein up to and including the date of the evidentiary hearing before the Superintendent of Insurance.
4. The terms "you" "your" and "Maine Medical Association" shall include, but not be limited to, Maine Medical Association, Thomas Hayward, and Maroulla Gleaton, their subsidiaries, agents, employees, and all persons who have acted or purported to act on their behalf.
5. The terms "relating to" or "relate to" shall include, but not be limited to, mentioning, discussing, depicting, describing, referring to, reporting on, constituting or concerning.

Requests

1. Do you contend or expect to contend that, after the proposed change of control, Anthem Health Plans of Maine d/b/a Anthem Blue Cross and Blue Shield ("AHP") could not satisfy the requirements for the issuance of a certificate of authority according to requirements in force at the time of the issuance of its certificate of authority to do the insurance business which it intends to transact in this State (24-A M.R.S.A. §§ 222(7)(A)(1), 400 - 428, and 3476(2)(B))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
2. Do you contend or expect to contend that the effect of the proposed purchase of BCBSME by Anthem, or the proposed transfer to AHP of BCBSME’s contracts through bulk reinsurance, may be substantially to lessen competition in insurance in this State or tend to create a monopoly therein, or would violate the laws of this State or of the United States relating to monopolies or restraints of trade (24-A M.R.S.A. §§ 222(7)(A)(2), 3476(2)(D) and 3483(2)(E))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
3. Do you contend or expect to contend that the financial condition of Anthem is such as would jeopardize the financial stability of BCBSME or its two HMO subsidiaries, Maine Partners and Central Maine Partners, or prejudice the interest of their policyholders or enrollees (24-A M.R.S.A. § 222(7)(A)(3))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
4. Do you contend or expect to contend that Anthem or AHP has plans or proposals to liquidate, to sell the assets of, to merge, or to make any other major change in the business or corporate structure or management of BCBSME or its two HMO subsidiaries, Maine Partners and Central Maine Partners, that would be unfair or prejudicial to policyholders or enrollees (24-A M.R.S.A. §§ 222(7)(A)(4))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
5. Do you contend or expect to contend that the competence, experience and integrity of those persons who propose to control the operation of AHP and BCBSME’s two HMO subsidiaries, Maine Partners and Central Maine Partners, indicate that it would not be in the interest of policyholders, enrollees or the public to permit them to do so (24-A M.R.S.A. § 222(7)(A)(5))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
6. Do you contend or expect to contend that Anthem is not qualified by character, experience and financial responsibility to control and operate AHP and BCBSME’s two HMO subsidiaries, Maine Partners and Central Maine Partners, or cause them to be operated, in a lawful and proper manner (24-A M.R.S.A. § 3476(2)(A))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
7. Do you contend or expect to contend that Anthem or AHP, or any of its directors, officers or other managers are incompetent, dishonest, untrustworthy, of unfavorable business repute, or so lacking in insurance company managerial experience in operations of the kind proposed in this State as to make such operation, currently or prospectively, hazardous to, or contrary to the best interests of, the insurance-buying or investing public of this State?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
8. Do you contend or expect to contend that Anthem or AHP is affiliated directly or indirectly with any person or persons of unfavorable business repute, or whose business operations in this State or elsewhere are or have been marked, to the injury of insurers, stockholders, policyholders, creditors or the public, by illegality, or by manipulation of assets, or of accounts, or of reinsurance or by bad faith (24-A M.R.S.A. § 407(2))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
9. Do you contend or expect to contend that the proposed acquisition of control of BCBSME by Anthem, including the proposed acquisition of the stock of BCBSME’s two HMO subsidiaries, Maine Partners and Central Maine Partners, would tend to affect adversely the contractual obligations of BCBSME or its two HMO subsidiaries, Maine Partners and Central Maine Partners, or their ability and tendency to render service in the future to their policyholders, enrollees and the public (24-A M.R.S.A. § 222(7)(A)(7))?

   If so, please

   1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
   2. provide all documents upon which you base, or which support, that contention.
10. Do you contend or expect to contend that the interests of BCBSME, its two HMO subsidiaries, Maine Partners and Central Maine Partners, policyholders of those entities, or other stockholders of BCBSME’s two HMO subsidiaries, Maine Partners and Central Maine Partners, would be impaired through the proposed acquisition by Anthem (24-A M.R.S.A. § 3476(2)(C))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
11. Do you contend or expect to contend that the terms and conditions of BCBSME’s proposed conversion plan are unfair and inequitable or that BCBSME’s proposed conversion plan would adversely affect, in any manner, the services to be rendered to subscribers (24 M.R.S.A. §§ 2301(9-D)(E)(1) and (9-D)(L))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
12. Do you contend or expect to contend that, immediately after, and giving effect to the terms of, BCBSME’s proposed conversion, the converted stock insurer would be in unsafe and unsound financial condition and would have paid-in capital stock and surplus in amounts less than the minimum paid-in capital stock and surplus set forth under Title 24-A, section 410 required of a domestic stock insurer authorized to transact like kinds of insurance (24 M.R.S.A. § 2301(9-D)(E)(5))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
13. Do you contend or expect to contend that BCBSME’s management has, through reduction in volume of new business written or cancellation or through any other means, sought to reduce, limit, or affect the number or identity of BCBSME’s subscribers to be entitled to participate in the conversion plan or to secure for the individuals comprising management any unfair advantage through the conversion plan (24 M.R.S.A. § 2301(9-D)(E)(6))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
14. Do you contend or expect to contend that BCBSME’s proposed conversion plan is inconsistent with the proposed charitable trust plan or adversely affects the distribution of BCBSME’s value to the charitable trust (24 M.R.S.A. § 2301(9-D)(E)(8))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
15. Do you contend or expect to contend that BCBSME’s proposed conversion plan does not comply with all applicable law (24 M.R.S.A. § 2301(9-D)(E)(9))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
16. Do you contend or expect to contend that the proposed plan and agreement of bulk reinsurance between BCBSME and AHP is unfair or inequitable to any insurer or to policyholders involved (24-A M.R.S.A. § 3483(2)(A))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
17. Do you contend or expect to contend that the proposed bulk reinsurance agreement between BCBSME and AHP, if effectuated, would substantially reduce the protection or service to the policyholders of BCBSME or its two HMO subsidiaries, Maine Partners and Central Maine Partners (24-A M.R.S.A. § 3483(2)(B))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
18. Do you contend or expect to contend that the proposed bulk reinsurance agreement between BCBSME and AHP does not embody adequate provisions by which AHP becomes liable to the original insureds of BCBSME for any loss or damage occurring under the policies reinsured in accordance with the original terms of such policies (24-A M.R.S.A. § 3483(2)(C))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
19. Do you have other objections to the proposed bulk reinsurance agreement between BCBSME and AHP (24-A M.R.S.A. § 3483(2)(F))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that objection(s), and
    2. provide all documents upon which you base, or which support, that objection(s).
20. Do you contend or expect to contend that BCBSME’s proposed plan of voluntary dissolution is unlawful or unfair or inequitable or prejudicial to the interests of any stockholder, policyholder or creditor (24-A M.R.S.A. § 3484(2))?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
21. Do you contend or expect to contend that the price to be paid by Anthem does not reflect the fair market value of the BCBSME assets to be acquired by Anthem?

    If so, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
22. If you contend that the proposed transaction between Anthem and BCBSME does not satisfy one or more of the relevant statutory inquiries set forth in the Superintendent’s November 4, 1999 Notice of Hearing, please state whether your contention is because Anthem is the acquiring insurer, or whether your contention would be the same no matter the identify of the acquirer.

    If the former, please

    1. state in detail all facts, analyses and other information of any kind upon which you base, or which support, that contention, and
    2. provide all documents upon which you base, or which support, that contention.
23. Please identify all experts you expect to provide testimony in this case. With respect to each expert, state the compensation paid, or to be paid, to the expert; the subject matter of his or her testimony; the substance of all facts and opinions to be offered by the expert; a summary of the grounds for each opinion; a summary of his or her qualifications; and provide the expert’s curriculum vitae, a list of all the expert’s publications, and identify and provide any written reports, notes, memoranda, or other documents prepared by or for the expert in connection with his or her opinions (including any drafts thereof) and all documents and information reviewed by, considered, and/or relied upon by the expert when analyzing, evaluating, or investigating any matter related to the transactions proposed in this case (If the source material is published, please provide the citation).
24. Please provide all documents which support, or would tend to support, approval of Anthem’s proposed acquisition of BCBSME, or satisfaction of any of the relevant statutory inquiries. If you contend that any of the relevant statutory inquiries is not satisfied in this case, include in your response any documents that would contradict, criticize, or call into question or doubt, that contention(s).
25. If you are an association, coalition or alliance, please provide all documents (including board, packets, board minutes, and memoranda) reflecting discussions by the association’s board of directors trustees or its officers concerning any of the following topics: 1) the conversion of BCBSME to a for-profit stock form; 2) the sale of the assets of BCBSME to Anthem or its subsidiaries; 3) the conduct of Anthem or its subsidiaries as a health insurer; or 4) the financial prospects of BCBSME at any time after January 1, 1998.
26. If you are an association, coalition or alliance, please provide all written or printed statements (including, without limitation, letters, newsletters, correspondence, e-mails, computerized files) provided to association members, media (newspapers, television, radio), or governmental officials (other than the Maine Bureau of Insurance) concerning any of the following topics: 1) the conversion of BCBSME to a for-profit stock form; 2) the sale of the assets of BCBSME to Anthem or its subsidiaries; 3) the conduct of Anthem as a health insurer; 4) the financial prospects of BCBSME at any time after January 1, 1998.
27. Please provide all documents concerning the purpose, intent, or meaning of Chapter 344 of the Laws of 1997 (L.D. 1849), including without limitation memoranda, press releases, proposed or actual testimony).

NOTICE
TO INTERVENORS

IN HIS NOVEMBER 4, 1999 PROCEDURAL ORDER, THE SUPERINTENDENT ADVISED THAT "[S]HOULD ANY PARTICIPANT VIOLATE OR DISREGARD ANY BUREAU RULE OR ORDER OF THE SUPERINTENDENT, THE SUPERINTENDENT SHALL, WITHOUT ANY FURTHER NOTICE, HAVE THE OPTION AND MAY EXERCISE THE OPTION, TO IMPOSE AN APPROPRIATE SANCTION, INCLUDING, WITHOUT LIMITATION, DENIAL OF ANY RELEVANT PARTICIPANT REQUEST; STRIKING MATERIAL FROM THE RECORD; OR CONSIDERATION, AND/OR REDUCTION OR ELIMINATION OF THAT PARTICIPANT’S PARTICIPATION IN THE PROCEEDINGS."

 

DATED: February 4, 2000

_____________________________

James B. Zimpritch, Esq.

Jeffrey M. White, Esq.

Catherine R. Connors, Esq.

PIERCE ATWOOD

One Monument Square

Portland, Maine 04101

(207) 791-1100

Attorneys for Anthem Insurance Companies, Inc

 

Robert S. Frank, Esq.

HARVEY & FRANK

Two City Center, Fourth Floor

Portland, Maine 04101

(207) 775-1300

Attorney for Blue Cross and Blue Shield of Maine

 

 

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on February 4, 2000 a copy of Applicants’ First Discovery Request to Maine Medical Association was served via hand delivery, regular mail or electronic mail on each of the persons listed below.

 

Robert S. Frank, Esq.

Harvey & Frank

Two City Center

P.O. Box 126

Portland, Maine 04112

e-mail: frank@harveyfrank.com

(Blue Cross/Blue Shield of Maine)

 

Judith Chamberlain, Esq.

State of Maine

Department of the Attorney General

6 State House Station

Augusta, Maine 04333-0006

e-mail: judy.chamberlain@state.me.us

(Bureau of Insurance)

 

William H. Laubenstein, Esq.

State of Maine

Department of the Attorney General

6 State House Station

Augusta, Maine 04333-0006

e-mail: bill.laubenstein@state.me.us

(Office of the Attorney General)

 

Gregory A. Brodek, Esq.

Duane, Morris & Heckscher, LLP

15 Columbia Street, 4^th Floor

Bangor, Maine 04401-6355

e-mail: gabrodek@duanemorris.com

(Maine Health Alliance)

 

Joseph P. Ditre, Esq.

Consumer Health Law Program

One Weston Court, Level One

P.O. Box 2490

Augusta, Maine 04338-2490

e-mail: jditre@mainecahc.org

(Consumers for Affordable Health Care Foundation/Coalition)

 

Michele M. Garvin, Esq.

Ropes & Gray

One International Place

Boston, Massachusetts 02110-2624

e-mail: Mgarvin@Ropesgray.com

(Central Maine Healthcare Corporation; Central Maine Partners Health Plan)

 

Robert I. Goldman

Maine Council of Senior Citizens

27 Bowery Beach Road

Cape Elizabeth, Maine 04107

e-mail: Rgoldma1@maine.rr.com

(Maine Council of Senior Citizens)

 

Bonnie Post

Executive Director of the Maine Ambulatory Care Coalition

P.O. Box 390

Manchester, Maine 04351

e-mail: bdpmacc@mint.net

(Sacopee Valley Health Center, Regional Medical Center at Lubec, Eastport Health Care, Inc., and the Maine Ambulatory Care Coalition)

 

John Dieffenbacher-Krall

Executive Director

Maine People’s Alliance

192 State Street

Portland, Maine 04101

e-mail: MPA@gwi.net

(Maine People’s Alliance)

 

Gordon H. Smith, Esq.

Maine Medical Association

30 Association Drive

P.O. Box 190

Manchester, Maine 04351

e-mail: gsmith@ctel.net

(Thomas D. Hayward, M.D.,

Maroulla S. Gleaton, M.D.,

And the Maine Medical Association)

 

Donald E. Quigley, Esq.

General Counsel

465 Congress Street, Suite 600

Portland, Maine 04101-3537

e-mail: quigld@mail.mmc.org

(Maine Medical Center)

 

Sandra L. Parker, Esq.

Attorney for MHA, Inc.

150 Capitol Street

Augusta, Maine 04330

e-mail: sparker@themha.org

(MHA, Inc.)

 

Kellie P. Miller, M.S.

Executive Director

Maine Osteopathic Association

693 Western Avenue

Manchester, Maine 04351

e-mail: meosteo@mint.net

(Maine Osteopathic Association)

 

Edward Miller

Executive Director

American Lung Association of Maine

122 State Street

Augusta, Maine 04330

e-mail: emiller@mainelung.org

(American Lung Association of Maine)

 

 

 

DATED: February 4, 2000

_____________________________

James B. Zimpritch, Esq.

Jeffrey M. White, Esq.

Catherine R. Connors, Esq.

PIERCE ATWOOD

One Monument Square

Portland, Maine 04101

(207) 791-1100

Attorneys for Anthem Insurance Companies, Inc.

 

 

 

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