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Maine.gov > PFR Home > Insurance Regulation > Hearing Decision Index > Document 535 : INS 99-14 : Hearing Decision
STATE OF MAINE
CERTIFICATE OF SERVICE
The above signed person hereby certifies that on March 10, 2000, he caused a copy of the following documents to be served by United States mail, first class postage prepaid, on each of the persons listed below.
James Zimpritch, Esq.
Judith Chamberlain, Esq.
Martin Robles, Esq.
William Laubenstein, Esq.
Gregory A. Brodek , Esq. (Maine Health Alliance)
Andrew B. MacLean, Esq. (Thomas D. Hayward, M.D., Maroulla S. Gleaton, M.D., and the Maine Medical Association)
Joseph P. Ditre, Esq. (Consumers for Affordable Health Care Foundation/Coalition)
John Kane, Esq. (Central Maine Healthcare Corporation)
Robert I. Goldman (Maine Council of Senior Citizens)
Bonnie Post (Sacopee Valley Health Center, Regional Medical Center at Lubec, Eastport Health Care, Inc. and the Maine Ambulatory Care Coalition)
John Dieffenbacher-Krall (Maine Peoples Alliance)
Donald E. Quigley, Esq.
Kellie P. Miller, M.S., (Maine Osteopathic Association)
Sandra L. Parker, Esq., (Maine Hospital Association
STATE OF MAINE
BlueCross BlueShield of Maine ("BCBSME") endorses and adopts the arguments set forth by Applicant Anthem Insurance Companies in its Objections to Intervenors Designation of Issues.
Most of the objectionable designations reflect Intervenors efforts to have the Superintendent impose various restrictions on the manner in which Anthem would do business in Maine following the acquisition of BCBSMEs assets. Almost all of these restrictions are novel, in the sense that none of the health insurers in Maine including BCBSME is currently laboring under such restrictions. Some of the objectionable designations reflect efforts to straitjacket Anthem into conducting its business in Maine the same manner as BCBSME currently prosecutes its business, even though BCBSME is free to change its practices as market circumstances dictated.
For the reasons set forth in Anthems objections, virtually all of the issue designations relating to Anthems conduct post-closing share one trait they are not within the compass of the relevant statutory criteria, set out in the Superintendents October 19th Notice of Hearing. In the interests of clarity and economy, BCBSME requests the Superintendent to rule now that such issues do not embody criteria that Applicants must satisfy in this proceeding. In so ruling, the Superintendent will be mindful of the bedrock principle of administrative law that his "interpretation of a statute administered by [him], while not conclusive or binding on [the] court[s] , will be given great deference and should be upheld unless the statute plainly compels a contrary result." Davric Maine Corp. v. Maine Harness Racing Comm'n., 732 A.2d 289, 293 (Me. 1999), quoting Town of Madison v. Public Utils. Comm'n., 682 A.2d 231, 234 (Me.1996).
One of the objectionable issue designations concerns the standards for BCBSMEs conversion, and BCBSME wishes to address this issue directly in this abbreviated memorandum. Maine Medical Association has proposed the following as an issue in this proceeding:
Whether Applicants have failed to demonstrate that BCBSME could not financially recover and operate successfully now that Tufts Health Plan of New England (TNE) is in liquidation and Harvard-Pilgrim Health Plan is in receivership. Given the shrinking number of competitors, BCBSME can "grow" out of its financial difficulties without selling, and a sale of assets is not required to enable the continued operations of BCBSME.
With all due respect to MMAs position, this is not a hurdle that BCBSME must negotiate in order to convert to stock form and sell its assets to Anthem. The statutory provisions governing BCBSMEs conversion, 24 M.R.S.A. 2301-(D), enumerates the governing criteria for the Superintendents approval of BCBSMEs application to convert, and 24-A M.R.S.A. 222 sets for the criteria governing Anthems acquisition of BCBSMEs assets. There is no requirement in either statute that BCBSME demonstrate that its conversion and sale was its only business option. These statutes do not authorize the Superintendents disapproval of BCBSME application if it were determined that BCBSME has other options available to it. The power and discretion to determine what is prudent and expedient for BCBSME as a charitable corporation lay with the BCBSMEs Board of Directors. The Superintendents statutorily-defined role in this proceeding is not to substitute himself for the BCBSME Board, but to determine whether the statutory criteria have been satisfied.
In fact, in enacting 24 M.R.S.A. § 2301, the Legislature implicitly but unmistakably made a contrary judgment the judgment that BCBSME need not demonstrate, as a condition to converting to stock form, that such a conversion was its only option or even the most viable of its options. 24 M.R.S.A. § 2301, sub-§ 9G authorizes Blue Cross to convert stock form, and to make an initial public offering of its stock, with the proceeds of the offering paid to a charitable foundation. Such a public stock offering would be feasible only if the Companys business prospects as a stand-alone enterprise were bright enough to attract equity investment by public investors. By explicitly authorizing BCBSME to convert to stock form in a transaction that could succeed, almost by definition, only if the company were under no exigency to convert, the Legislature implicitly rejected necessity as a criterion for conversion.
This is not to say that the circumstances that motivated BCBSME to contract with Anthem are not relevant to one of the statutory criteria whether policyholders would be prejudiced by the transaction. In applying this criterion, the Superintendent could determine that policyholders may have been worse off absent the transaction, because of the possible sequelae to BCBSMEs recent financial reverses. But while the presence of such factors may reinforce the Superintendents determination that policyholders are not prejudiced by the transaction, the absence of such factors is not a grounds for denying BCBSMEs application, because the controlling statutes do not impose such a requirement.
Date: March 10, 2000
HARVEY & FRANK
Two City Center
Portland, Maine 04112-0126
Attorneys for BlueCross BlueShield
Last Updated: August 22, 2012
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