Document 45 : Docket No. 99-14 : Hearing Decision : Bureau of Insurance

STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF INSURANCE
34 STATE HOUSE STATION
AUGUSTA, MAINE 04333-0034

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	)
	)	CAHC Coalition
Application of Anthem Health Plan of Maine, Inc., To Acquire	)	Amended Motion to
the Assets of Associated Hospital Service of Maine,	)	Intervene
d/b/a Blue Cross and Blue Shield of Maine, and Related	)
Transactions	)
	)
Consolidated Docket No. INS 99-14	)

Now comes Consumers for Affordable Health Care, by and through its attorneys, with its amended motion to intervene as a matter of right, pursuant to 5 M.R.S.A. §9054(1) and Bureau of Insurance Rule Chapter 350 (7), in the above captioned matter on behalf of its members and the Maine public for the following reasons:

Consumers for Affordable Health Care (hereafter "CAHC") is a statewide coalition of individuals, businesses and organizations whose mission includes advocacy on behalf of consumers and the public in health care and health insurance matters (see attached membership list);

CAHC was established in May 1988 and has been involved in numerous matters relating to health insurance before the Maine legislature and the Bureau of Insurance during the course of the past 11 years;

CAHC members and its attorneys have participated in other adjudicatory proceedings before the Bureau of Insurance, most recently the licensure of joint venture HMOs known as Maine Partners Health Plans and Central Maine Partners Health Plans in 1997;

By unanimous vote of the CAHC board of directors, CAHC has decided to intervene in this proceeding;

CAHC’s membership includes individuals who are, or organizations which represent or employ, persons with chronic illnesses and diseases, children, women, elderly, disabled, persons living with AIDS, low-income and low wage persons, and publicly insured persons among others;

CAHC’s membership also includes health care provider organizations such as the Maine Chapter of the National Association of Social Workers, the Maine Nurse Practitioners Association, Family Planning Association of Maine, and the Maine Psychological Association to the extent that such organizations are interested in advancing the interests of health care consumers in Maine;

CAHC’s membership includes a significant number of persons who are BCBSME subscribers, enrollees, contract holders or policy holders;

CAHC’s member organizations, which include among others the Maine AFL-CIO and the AARP/Maine, collectively represent an estimated 200,000 Maine citizens;

Blue Cross and Blue Shield of Maine has publicly stated that it insures over 382,000 Maine citizens, or 1-out-of-3 Maine citizens; applying that proportion to the 200,000 citizens represented by CAHC member organizations would mean that more than 66,000 are or may be insured by BCBSME;

As BCBSME subscribers, enrollees, contract holders or policy holders, CAHC members have interests in affordable, accessible and quality health insurance products and health care services which may be substantially and directly affected by the proceeding;

CAHC’s members also include uninsured and underinsured individuals and families who rely on the availability of free or low cost services made available by or with the financial support of public charities such as BCBSME;

CAHC, by and through its attorneys, has obtained and reviewed the Initial Consolidated Filing and information from states in which Anthem Insurance Companies, Inc. (hereafter "Anthem") or its affiliates and/or subsidiaries transact health insurance business as Blue Cross and Blue Shield licensees. The information includes: a) reports by Insurance Departments in other states based on Anthem filings; b) Anthem notices to policyholders and the general public; c) complaint ratios assembled by state insurance departments; d) court filings; e) news articles and releases by or about Anthem; and f) other documents;

CAHC, by and through its attorneys, has obtained and reviewed documents filed by BCBSME with various Maine departments and agencies regarding its insurance products and rate filings as well as its charitable spending and charitable acts in Maine;

The above information supports the contention that CAHC members will or may be substantially and directly affected by the proceeding;

Based on information available to them, CAHC members have interests in, inter alia, Anthem’s corporate structure and management, benefits and coverage policies, premium increases, rating and underwriting practices, claims processing and administration, employment practices, grievance and appeals mechanisms, administrative costs, provider networks and provider contracting, and commitment to community benefits and support that will or may be substantially and directly affected by the proceeding;

Among other ways that CAHC members will or may be substantially and directly affected are the following:

Anthem’s ability to meet financial liabilities;

Anthem’s ability to purchase BCBSME out of reserves without raising premiums for current BCBSME subscribers, enrollees, contract holders or policy holders (see attached notice to Anthem BCBS of Kentucky policyholders);

Possible premium increases for BCBSME subscribers, enrollees, contract holders or policy holders due to liabilities such as funding the charitable trust, failure to gain efficiencies in the New England region or other outstanding liabilities due to other purchases or litigation settlements around the country;

Possible delays in, or improper notification of BCBSME subscribers, enrollees, contract holders or policy holders when, processing appeals and/or claims for payment under Anthem’s ownership (see attached Indianapolis Star article dated Sept. 30, 1999);

The affects of a closed bidding process resulting in one offer to purchase without surplus notes on the price, terms and conditions of the proposed sale;

Anthem’s high complaint ratio as a percentage of its market share in Indiana and possible increases in complaints in Maine for BCBSME subscribers, enrollees, contract holders or policy holders;

Anthem’s underwriting practices that may make items, services or prescription drugs unavailable to BCBSME subscribers, enrollees, contract holders or policy holders (see attached article from the Cincinnati Enquirer dated July 28, 1999);

The impact on BCBSME subscribers, enrollees, contract holders or policy holders of Anthem’s lower quality of care measures compared to BCBSME as reported by the Portland Press Herald;

Proposed changes to corporate structure or management that may affect employment practices, medical decisionmaking and policymaking, provider contracting, provider networks, community relations, and participation in various markets or products such as the non-group and small group (see, Statement of S. Stephen Rosenfeld, Senior Legal Advisor, Community Catalyst on the proposed purchase of Blue Cross and Blue Shield of New Hampshire by Anthem Insurance Companies, Inc. dated August 26, 1999);

The potential impact of a demutualization of Anthem on premiums, corporate structure and management, benefits and coverage policies, rating and underwriting practices, quality of care issues and commitment to community benefits (see attached Indianapolis Star article dated December 1, 1998);

The effects of Rhode Island’s decision not to sell to Anthem on its ability to gain efficiencies to offset the need for premium increases to be paid by BCBSME subscribers, enrollees, contract holders or policy holders (see Providence Journal article dated September 25, 1999 attached);

The potential effects on Anthem’s market share, rating practices and premiums of strong Maine public opposition to BCBSME becoming part of a larger national insurance company (see attached Strategic Marketing Services Fall 1999 Omnibus Poll conducted Sept. 10 – 13, 1999, page 17);

In support of the allegations contained herein, CAHC has attached the affidavits of individual and organizational members as follows: Peter Thompson, Yarmouth; Gwen Gatcomb, Interim President, Maine AFL-CIO; Martha Jordan, Executive Director, Maine Chapter of the National Association of Social Workers; and Charleen Chase, Executive Director, Community Concepts; B.J. Bangs, Multiple Sclerosis Society of Maine;

For all of the above reasons, CAHC requests that its amended motion to intervene as a matter of right on behalf of its individual and organizational members, who are BCBSME subscribers, enrollees, contract holders or policy holders, and the Maine public be GRANTED.

Respectfully submitted,

__________________________

Joseph P. Ditre, Esq.

Consumer Health Law Program

A Program of CAHC Foundation

One Weston Court, Level One

P.O. Box 2490

Augusta, ME 04338-2490

Phone: (207) 622-7083

Fax: (207) 622-7077

Email: jditre@mainecahc.org

_________________________

Patrick Ende, Esq.

Maine Equal Justice Partners

65 State Street, 2^nd Foor

P.O. Box 5347

Augusta, ME 04332-5347

Ph: 207-626-7058

Fx: 207-621-8148

Email: pende@mejp.org

Pc: Judith Shaw Chamberlain, Esq., AAG

Linda Pistner, Esq., Deputy Chief Attorney General

William H. Laubenstein, III, Esq., AAG

James B. Zimpritch, Esq., Pierce Atwood

Robert S. Frank, Esq., Harvey and Frank

STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF INSURANCE
34 STATE HOUSE STATION
AUGUSTA, MAINE 04333-0034

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	)
	)	CAHC Coalition
Application of Anthem Health Plan of Maine, Inc., To Acquire	)	Motion for Leave to
the Assets of Associated Hospital Service of Maine,	)	Amend Motion to
d/b/a Blue Cross and Blue Shield of Maine, and Related	)	Intervene
Transactions	)
	)
Consolidated Docket No. INS 99-14	)

Now Come Consumers for Affordable Health Care Coalition, by and through its counsel, with its motion for leave to amend its intervention motion.

I. Background

Consumers for Affordable Health Care Coalition (CAHC Coalition) seeks leave of the Superintendent to amend its motion to intervene in order to gain efficiencies in the proceeding by collaborating to the extent possible with other intervenors. At the time of its preparation and filing, counsel for CAHC Coalition was unaware that some of its member organizations had sought intervention in their own right. The members of these organizations have identified issues and interests in their motions that CAHC Coalition is unable or unwilling to represent in the proceeding.

No new paragraphs have been added to CAHC Coalition’s motion and one paragraph (7) has been removed. CAHC Coalition has amended its motion by removing reference to the Maine Ambulatory Care Coalition in paragraph 6 and the Maine People’s Alliance in paragraph 9. It has amended paragraph 6 to clarify that CAHC Coalition’s health care provider members participate in CAHC Coalition only to the extent that such providers share CAHC Coalition’s consumer advocacy interests and that CAHC Coalition does not represent health care provider interests in provider issues. It has removed section 7 in its entirety. It has amended paragraph 17 to remove reference to Medicare supplemental and Medicare HMOs a subject raised by the Maine Council of Senior Citizens in its motion.

The Maine Ambulatory Care Coalition (MACC) is a health care provider organization which represents the interests of federally qualified health centers including rural health centers and the individual providers they employ. CAHC Coalition does not represent the health care provider interests of its health care provider members such as MACC. MACC, like other provider organizations, is a member of the CAHC Coalition to the extent that it shares common interests in advocating for consumers in health insurance and health care matters. The issues that MACC, as a provider organization, has raised in its motion are provider issues and cannot be adequately represented by CAHC Coalition.

The Maine Council of Senior Citizens (MCSC) is a senior citizen advocacy organization. It is a member of the National Council of Senior Citizens. MCSC has competency and expertise in health care and health insurance issues specific to senior citizens through its years of work and as a state affiliate of NCSC. In addition, MCSC has access to technical assistance from its national organization. Such assistance may serve to expedite consideration of issues they have raised.

The Maine People’s Alliance (MPA) is a citizen action organization with 16,000 members. To date, MPA is the only organization in the CAHC Coalition that has publicly announced its opposition to the proposed sale of Blue Cross and Blue Shield of Maine (BCBSME). It has focused its opposition to the proposed sale, in part, on the for-profit nature of Anthem, Inc. CAHC Coalition has not taken a position in favor of or in opposition to the proposed sale to date. CAHC Coalition is unable and unwilling to represent the interests of the Maine People’s Alliance in this proceeding.

This motion for leave to amend comes at a time in which no prejudice will come to the parties.

II. Argument

The Maine Administrative Procedures Act, 5 M.R.S.A. §8001 et seq. and the Bureau of Insurance Rule Chapter 350 govern the procedures in this proceeding. Bureau Rule Chapter 350 §7 allows for motions or requests such as motions for leave to amend. While no specific criteria regarding consideration of motions to amend is stated, courts generally grant leaves to amend pleadings unless a party would suffer substantial legal prejudice. At this stage of the proceeding, neither the applicants nor any party will be prejudiced.

CAHC Coalition requests this leave to amend in order to comply with the Superintendent’s interest stated at the October 29^th pre-hearing conference in having the intervenors coordinate drafting discovery requests to the extent possible. Since applying for intervention status, three of its member organizations have separately applied for such status. These organizations have raised issues in their filings which require certain expertise and capacities, or raise potential conflicts of interests, or state positions which CAHC Coalition has not taken.

Unless otherwise restricted by agency order or by agreement of the parties, the hearing shall give all parties the chance to present evidence and argument, call witnesses and present testimony, and cross examine all witnesses. 5 M.R.S.A. § 9056(2). Consolidation or coordination in agency proceedings is premised on commonalities of interests and issues to be presented. In the instant proceeding, CAHC Coalition cannot represent the distinct interests of health care providers such as MACC. Representing the interests of providers would conflict with CAHC Coalition’s mission to advocate on behalf of consumers.

Where substantive issues like those raised by the MPA and MCSC are distinct from those raised by CAHC Coalition, commonality does not exist. To the extent that there are common issues, CAHC Coalition will coordinate drafting its discovery requests with other intervenors and adhere to the Superintendent’s procedural order.

The proposed transaction is a matter of tremendous public concern. Moreover, it presents complex issues. Where proposed intervenors have capacities, expertise and/or access to technical assistance through representation of their particular constituencies, efficiencies can be gained in the proceeding. Such capacities and expertise enables these organizations to focus their issues and presentations for the adjudicators that otherwise would be lost in more generalized presentations.

A similar proceeding was held in New Hampshire in which twelve organizations or associations were permitted to intervene. The proceeding was conducted in an orderly and timely fashion without prejudice to the interests of any one intervenor. To date, seven organizations or associations have sought intervention status in this proceeding.

For all of the reasons above, CAHC Coalition requests that the Superintendent GRANT its motion for leave to amend its intervention application and permit the above mentioned organizations to intervene in their own right.