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 |
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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) |
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ANTHEM INSURANCE COMPANIES,
INC.’S STATEMENT IN OPPOSITION TO CONSUMER INTERVENORS’ MOTION TO COMPEL
February 23, 2000 |
INTRODUCTION
In its Memorandum in Support of Objections to the Consumer Intervenors, dated February
14, 2000 ("Memo"), Anthem detailed the chronology of this proceeding, including
the voluminous discovery already produced by the Applicants, and its objections to
providing all of the information responsive to the late and overly burdensome requests
served by the intervenors. To avoid repetition, Anthem incorporates the Memo, and in
particular the section entitled "General Objections to the Scope and Breadth of the
Request", by reference.
Although Anthem objected to the Consumer Intervenors’ First Discovery Request (the
"Request"), Anthem provided substantial written and documentary responses in an
effort to give the Consumer Intervenors meaningful responses. Notwithstanding
Anthem’s substantive response, the Consumer Intervenors have now moved to compel
Anthem to provide additional information.
The Applicants have already responded to over 300 multi-part discovery requests and
submitted responsive documents that would fill more than 6 banker boxes. For the reasons
set forth below, and in the Memo, Anthem objects to having to answer still more discovery
responses this late in the proceeding and at a time when the Company’s focus should
be turned toward preparation of prefiled testimony and the April hearing.
Each of the disputed requests is discussed in turn.
DISCUSSION
- Please provide all documents prepared by or for the applicants related to purchasing any
interest in Harvard Pilgrim Community Health Plans. Please describe in detail any and all
discussions and/or communications by Anthem with Harvard Pilgrim Community Health Plans or
its representatives and/or with any governmental agency having jurisdiction over Harvard
Pilgrim Community Health Plans.
Anthem’s Response
to Consumers’ Argument:
|
In its Memo, Anthem responded that, in the
absence of any agreement between Anthem and Harvard Pilgrim, the request is irrelevant.
That remains the case. All of the Consumer Intervenors’ arguments on the relevance of
the request rely on the underlying assumption that there is actually an agreement in place
for Anthem to purchase Harvard Pilgrim. Because there is no such agreement, the Consumer
Intervenors’ arguments are without merit. |
- Please provide all documents prepared by or for Anthem related to the preparation of the
attached Anthem policyholder notice in Kentucky (see Attachment "A").
Anthem’s Response
to Consumers’ Argument:
|
In its Memo, Anthem explained why the
transaction in Kentucky, and the policyholder notice, are irrelevant to this transaction.
The 1993 transaction in Kentucky transaction involved a merger where no "cash"
was to be paid. Also, the dispute surrounding the funding of the trust foundation in
Kentucky arose in the absence of a clear statutory guidance as to the effects of the
transaction. In the Kentucky merger, allocation of funds to a trust would have reduced
reserves, and Anthem so notified its policyholders. By contrast, the present transaction
is an acquisition with a specific dollar amount being paid for the BCBSME assets and a
specific statutory mechanism for allocating the proceeds. In other words, unlike in
Kentucky, the net purchase price will go to the trust fund and that will not reduce the
Maine BCBS reserves. Just as the Kentucky policyholder notice is irrelevant, so too are
"all documents prepared by or for Anthem" that are related to that notice. |
- Please provide a chart that describes in detail all Anthem purchases of BCBS plans
anywhere in the United States from 1993 to date and provide a schedule of premiums for
each and every product offered by the seller during the 24 month period prior to the sale
and by Anthem in the 24 month period subsequent to the sale. In states where Anthem has
less than one year of premium experience, such as New Hampshire and Colorado/Nevada,
please state the premiums currently in place and the premiums that Anthem has sought or
will seek in the next six months for each and every product offered.
Anthem’s Response
to Consumers’ Argument:
|
Anthem does not have any duty to generate new
analyses or obtain information from other sources in order to respond to discovery
requests from intervenors. In its Memo, Anthem reported that it does not have
pre-transaction premium information in many cases and it has no duty to research back to
1991 (i.e., 24 months prior to the Kentucky merger) to learn the premium that was
charged "for each and every product offered" by the pre-merger companies, and
then investigate what Anthem charged in premium during the subsequent 24 months "for
each and every product." Premium levels are driven by factors specific to particular
markets, including policy provisions and coverage; costs of services rendered by
providers; competition; and reserve requirements. Accordingly, even if Anthem had the
requested information readily available, in order to make a meaningful comparison, the
Superintendent would have to see evidence reflecting the premiums charged by all of
Anthem’s competitors in each state for the relevant periods as well (i.e.,
were any premium increases post-transaction out of line with premium increases for other
competitors in the specific region?). In addition, analysis of the factors affecting rates
in each market would be necessary for any meaningful analysis of rates. Comparison without
the market data for each region at the applicable time would be meaningless. But even if
Anthem’s singular data would have marginal relevance, it is outweighed by
Anthem’s burden if it is forced to perform the investigation necessary to respond to
the request. |
- For each purchase identified in response to question number 13, please provide a chart
that describes in detail each and every: a) product added and/or dropped; b) increase or
decrease in coinsurance rates and/or copayment amounts by item or service and by product;
c) increase or decrease in lifetime and/or annual benefit amounts or payments by product;
and d) increase or decrease in benefits and/or coverage levels by item or service and by
product, for the first 24 months after the purchase. In states where Anthem has less than
one year of experience, such as New Hampshire and Colorado/Nevada, please provide the
above information as it is currently in effect and any proposed modifications Anthem has
sought or will seek in the next six months for each and every product offered.
Anthem’s Response
to Consumers’ Argument:
|
For the same reasons articulated in response
to question no. 13, this request is irrelevant and unreasonably burdensome. This request
goes even further, however, requiring Anthem to create a "chart" that provides
detailed information on all product changes, changes in coinsurance rates, benefit
amounts, and benefit coverage levels for the first 24 months after the applicable
transaction with Anthem. The Consumer Intervenors say they want this information to
"determin[e] what would happen to any other Plan that Anthem takes over." Any
proper inquiry would be limited to what plans Anthem has for Anthem Health Plans of Maine,
Inc., i.e., the subsidiary to be formed in Maine if the present transaction is
approved. However, the question goes far beyond that. Moreover, Anthem has already
provided substantial information concerning its plans for Anthem Health Plans of Maine,
Inc. Most importantly, the proposed purchase contemplates bulk reinsurance of all of
BCBSME’s current health insurance products and Anthem’s assumption of all of
BCBSME’s provider agreements. Anything beyond the responses already provided is
irrelevant and certainly complying with this broad request is overly burdensome,
particularly in light of the tangential nature of the information sought. |
- Please provide all documents prepared by or for Anthem related to demutualization from
1995 to date.
Anthem’s Response
to Consumers’ Argument:
|
In its Memo, Anthem stated that, from time to
time, it has analyzed whether Anthem’s corporate missions and goals are best achieved
as a mutual company. To date, Anthem continues to be a mutual company. The Consumer
Intervenors argue that "[a]ny plans to demutualize would have a direct and
substantial affect on Maine policyholders under Anthem ownership in terms of price and
coverage policies." How? If the proposed transaction is approved, the subsidiary to
be formed, Anthem Health Plans of Maine, d/b/a Anthem BCBS, will be a for profit stock
company, not a mutual insurer. In any event, information regarding demutualization, beyond
that provided in the Memo, is irrelevant. |
- Please provide all documents prepared by or for Anthem Insurance Companies, Inc. of
Indiana related to the positive or negative effects a demutualization of Anthem Insurance
Companies, Inc. of Indiana would have on insureds in Maine and any other state in which
Anthem operates. Please describe in detail what persons would receive stock, dividends,
assets, or anything of value and in what proportions if Anthem Insurance Companies, Inc.
of Indiana were to demutualize under current Indiana law. Please provide all documents
prepared by or for Anthem Insurance Companies, Inc. of Indiana related to lobbying efforts
by Anthem Insurance Companies, Inc. of Indiana in connection with the passage of Senate
Bill 33, affecting Indiana Code sections 27-9-1, et seq.
Anthem’s Response
to Consumers’ Argument: |
Please see Anthem’s response to question
no. 18. |
- Please provide a chart that describes in detail the medical underwriting practices
and/or criteria used by the applicants by product and by item or service. Please include
in the chart all waiting periods, exclusions of services and items, exclusionary periods,
rate and rating variations which are dependent on age, sex, health status and medical
condition, used or in effect for each of the calendar years 1997, 1998, 1999 and 2000.
Anthem’s Response
to Consumers’ Argument:
|
Researching and preparing a new
"chart" that includes 4 years worth of data "by product and by item or
service" that includes all of the items enumerated in the request is unreasonable and
Anthem has no duty to do so in response to an intervenor’s discovery request.
Moreover, Anthem provided a fairly lengthy narrative response to this question, pointing
out that its underwriting practices are confined, in large part, to the regulations of the
applicable state. The burden of attempting to comply with the Consumer Intervenors’
request is far outweighed by the relevance of the response. |
- In which state(s) does Anthem impose or anticipate imposing waiting or exclusionary
periods for prescription drugs, durable medical equipment or supplies, and mental health
services? Please provide all documents related to the waiting or exclusionary period(s)
for each of these items and services.
Anthem’s Response
to Consumers’ Argument:
|
The Consumer Intervenors argue that
Anthem’s response to this request is incomplete in two ways: (1) that the response
does not include durable medical equipment, and (2) Anthem did not include a copy of the
referenced certificate rider. First, Anthem’s response does include
information concerning waiting periods for durable medical equipment: "Anthem’s
certificate rider for any new FDA-approved drug product or technology, including, but not
limited to, medications, medical supplies, and/or devices . . . is excluded from coverage
for the first six months after the date the product or technology received FDA new drug
approval or other applicable FDA approval."
Second, Anthem will provide a copy of the certificate rider as a supplement to the
initial response. |
- Please provide a list with the names, addresses and phone numbers of the independent
review organizations (IROs) with which Anthem and BCBSME have contracted and/or intend to
contract during the calendar years 1998, 1999, and 2000. Please provide the total number
of appeals made to each of these IROs during the calendar years 1998 and 1999. How many
appeals were denied in each of those years? Provide a redacted copy of a decision by each
of the identified IROs for each of the calendar years 1998 and 1999.
Anthem’s Response
to Consumers’ Argument:
|
Although irrelevant on its face, in response
to this question, Anthem provided a narrative and the names and addresses of the IROs with
whom it contracts. Anthem has already submitted information concerning customer
complaints, as well as its complaint ratios for the states in which it operates. The
burden of compiling the requested information for multiple years and in multiple
jurisdictions is outweighed by the minimal probative value of the information sought. In
light of the information already supplied, the Consumer Intervenors’ request to
review a redacted copy of an IRO decision is unreasonable in that review of one decision
in isolation would be meaningless. |
- Provide all documents prepared by or for Anthem and BCBSME which define or provide
definitions of the terms "medical necessity", "medically necessary",
"short term therapy", "case management", "experimental
treatment", "clinical trial" and "emergency" in effect during the
calendar year 1999 for each state in which Anthem operates.
Anthem’s Response
to Consumers’ Argument: |
In its Memo, Anthem explained that, because
Anthem is assuming the BCBSME policies, any relevant definitions of the above terms would
relate to those contracts. "All documents prepared by or for Anthem" that define
those terms "for each state in which Anthem operates" are irrelevant. As Anthem
has grown through Blue Cross and Blue Shield mergers and acquisitions, it has assumed
contracts of insurance that contain definitions for the above terms that are substantially
similar, but nonetheless not uniform. To date, the company has not taken any steps to
bring uniformity to these definitions on a company-wide basis. Thus, even if the
definitions in other states were marginally relevant, which they are not given the bulk
reinsurance agreement, the probative value is significantly outweighed by the burden on
Anthem if it is forced to produce all documents that contain definitions for any of those
terms and for all states. |
- Please provide all documents prepared by or for the applicants related to criteria used
or in effect for the purpose of determining whether someone qualifies and/or continues to
qualify for case management services for each of the calendar years 1998 and 1999. Please
provide the aggregate number of case management services requested and the aggregate
number of case management services denied by the applicants during those two years. How
many of those denials were appealed to the applicants? How many were reversed on appeal by
the applicants? Please provide one redacted copy of an Anthem decision and one redacted
copy of a BCBSME decision denying case management services for each of the calendars years
1998 and 1999.
Anthem’s Response
to Consumers’ Argument:
|
In response to this request, Anthem submitted
a lengthy narrative describing the diagnoses and services that would trigger case
management, as well as documents reflecting Anthem BCBS of Connecticut’s trigger
list. The Consumer Intervenors argue that Anthem "provided no documents that provide
the criteria for determining whether someone qualifies for case management services if
they have one of the diagnoses." As stated in the response, case management is
offered if a member is diagnosed with one of the illnesses, or requires one of the
services, outlined in the trigger lists provided in the response. |
DATED: February 23, 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
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on February 23, 2000 a copy of Anthem Insurance
Companies, Inc.’s Statement in Opposition to the Consumer Intervenors’ Motion to
Compel was served by email, United States mail, first class postage prepaid, or, where
indicated, by hand delivery, 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, 4th 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 23, 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.
