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Maine.gov > PFR Home > Insurance Regulation> Administrative & Enforcement Actions > Document 556 : INS 99-14 : Hearing Decision
STATE OF MAINE
Pursuant to the Superintendents Order on Applicants Request to Compel Responses to Discovery Requests, Maine Medical Association ("MMA") filed its Designation of Issues with the Superintendent on March 3, 2000. Other provider intervenors also filed designations of issues, and on March 10, Anthem Insurance Companies, Inc. ("Anthem") and Blue Cross Blue Shield of Maine ("BCBSME") each filed Objections to Intervenors Designations of Issues.
BCBSME has endorsed and adopted the objections submitted by Anthem and has made separate comments concerning the standards of review to be used by the Superintendent in determining whether to approve or disapprove the proposed transactions. Accordingly, the objections of Anthem will be addressed first, and the separate statements of BCBSME will be addressed subsequently.
Objections of Anthem:
Objection 1. MMA Issue -Commercial Insurance Market.
The objection stated is that there is no statutory requirement that Applicants establish that BCBSME could not recover from its identified problems without the proposed acquisition of the assets of BCBSME by Anthem.
The "issue" presented by MMA for consideration by the Superintendent is whether BCBSME has the resources to continue as a going concern in the event that the Superintendent determines, for any reason, that the proposed transactions should be disapproved. In considering the several standards for determining whether the proposed transactions should be approved, the financial strength and ability of BCBSME to continue operations as a going concern should be viewed as a material matter. The ability of BCBSME to continue to provide services to enrollees should be considered in any determination whether the proposed transactions would be unfair, inequitable or prejudicial to the interests of any policyholder or creditor of BCBSME. Standard of Review 24.
Objection 2. MMA Issues - Anthem East and Integration.
The objection stated is that Anthem is not required to present any information concerning "Anthem East" or any integration of operations because Anthem is not required by statute or regulations to establish a "regional system"; there is no statutory requirement to integrate BCBSME into any regional system; and there is no statutory requirement to show that "administrative efficiencies or superior operations" will be generated by Anthem.
The issue presented, simply, is whether Anthem has, or will have upon conclusion of this proceeding, provided appropriate information to the Superintendent to confirm its plans of operations and the ability of Anthem BCBSME to provide services to Maine enrollees. The statements of issues presented by MMA do not suggest that there is a statutory requirement to organize regional operations. BCBSME and Anthem have suggested that the resources of Anthem are required to enable BCBSME, otherwise a stand-alone health plan, to survive and compete in the marketplace, and Anthem has outlined its intention to proceed with the organization and operations of "Anthem East." In order to determine whether Anthem and "Anthem East" will be organized, staffed and equipped to provide health care services to Maine enrollees, the Superintendent must have information about proposed operations. The Superintendent should take notice of the problems that have developed with another health maintenance organization operating in Maine that has experienced substantial operational and financial problems because it failed to integrate appropriately the operations of its two component health plans that were merged together several years ago. If Anthem is to integrate operations, the question presented is whether Anthem and its management have substantial and successful experience in integrating separate HMO operations and have an appropriate plan for any integration of the BCBSME operations with operations of other health plans. This question should be viewed as highly relevant to this proceeding and to any determination whether Anthem will continue the operations of BCBSME without prejudice to enrollees.
The issues stated concerning "Anthem East" and integration are relevant to Standards of Review 6, 7, 10 and 24.
Objection 3. MMA Issue-Provider Agreements.
The issues suggested by MMA are whether provider contracts to be utilized by Anthem in Maine will be unfair, onerous and discriminatory and will adversely affect enrollees to the extent that the contract terms will cause providers to refrain from contracting with Anthem and thereby cause a reduction in enrollee access to providers and health care services.
The stated objections are that Anthem imposes no corporate or national mandates on the provider contract provisions to be negotiated and adopted by Anthem subsidiaries; that Anthem BCBSME will honor existing BCBSME provider contracts; that "regional management" will evaluate contract provisions to be negotiated and adopted when the existing BCBSME provider contracts expire; that the terms and provisions of provider contracts entered into by Anthem in other markets are not relevant to this proceeding; and that the Superintendents consideration of provider contract terms and provisions would single out Anthem for "different treatment" and there is nothing in the Insurance Code that justifies any such different treatment of Anthem.
Provider contracts substantially govern the provision of health care services to enrollees by physicians and other providers. Provider contract review by the Superintendent of Insurance is a required and usual process, and review of Anthem provider contracts should not be viewed as any different or discriminatory treatment of Anthem. If Anthem Maine or any other entity were to apply for a license to operate in Maine as a "new" HMO, Anthem or any other such entity would be required to submit proposed forms of provider contracts for review by the Superintendent. The proposed forms of provider contracts would also be presented to prospective providers for their review and acceptance or rejection. The process of review by providers and acceptance or rejection of a proposed new provider contract in the circumstances of a new HMO, with no enrollees or providers, is certainly different and less threatening to providers and enrollees than would be the same process of review and acceptance or rejection of new provider contracts presented by an HMO holding forty percent (40%) or more of the HMO enrollees in the marketplace. In the absence of any information from Anthem of the terms and provisions to be included by Anthem BCBSME in provider contracts after the expiration of existing BCBSME contracts, the track record of Anthem actions in other states, after the acquisition of health plans comparable to BCBSME, is probably the best evidence of provider contract policies to be applicable in Maine. Such information should be deemed to be highly relevant to this proceeding.
If the issues of Anthem provider contracting are not reviewed in this proceeding, the Superintendent will have no confirmation that substantial provider contracting problems will not be experienced when BCBSME contracts expire and will have no confirmation that enrollees will not be prejudiced by the proposed transactions and attendant provider contracting problems.
Issues concerning provider contracts are relevant to Standards of Review 4, 8,10 and 24.
Objection 4. MMA Issue-Lack of Data Management Systems.
Anthem has identified its business plan objective of transferring to providers a substantial portion of the risk of covering the cost of delivering health care services. If substantial risk were transferred to providers, providers would need substantial management and systems support to be successful in managing the risk. That support could be provided by Anthem in kind by its making available systems and management personnel that are appropriate and adequate to accomplish the tasks of risk management, or Anthem could pay to physicians and other providers from premium revenues the dollar amounts required to enable the providers to secure the systems and personnel required for the appropriate management of transferred risk. The availability of systems and management support is very material to the ability of providers to continue to provide services to enrollees if, indeed, providers are to be required by Anthem to accept any substantial portion of the risk of covering the costs of delivering health care services.
The issues of the availability and adequacy of data management systems to providers serving Anthem BCBSME enrollees are relevant to Standards of Review 8, 10 and 24.
Objection 5. MMA Issues-Payments to Providers, Access to Capital and Transfer of Capital.
The basic issue identified is whether Anthem will provide to Anthem BCBSME adequate capital to assure that the alleged financial problems of BCBSME will be alleviated and that Anthem BCBSME will be sufficiently capitalized to be able to provide health care services to enrollees. These issues of the capitalization of Anthem BCBSME should be viewed as primary issues for consideration in determining whether to approve the proposed conversion of BCBSME and sale of assets of BCBSME and to approve of the application of Anthem BCBSME for a license to operate as an HMO in the State of Maine. It is not clear that mere confirmation by Anthem that it will provide capital required to meet minimum statutory and Blue Cross Association requirements is sufficient to permit or persuade the Superintendent to approve the several transactions.
Issues of the capitalization of Anthem BCBSME are relevant to Standards of Review 8, 10 and 24.
Objections of BCBSME.
BCBSME adopts the objections presented by Anthem and complains that the issues presented by MMA do not "embody criteria that Applicants must satisfy in this proceeding;" that the "bedrock principle" of deference to administrative decisions must be recognized; and that there is no requirement that BCBSME establish that the proposed conversion and sale of assets to Anthem constituted the only option available to address the identified financial problems of BCBSME. At the same time, BCBSME does add the clarifying statement that it does not intend to suggest that the circumstances of the decision of BCBSME to contract with Anthem are not relevant to the statutory standards of this proceeding concerning fairness and prejudice to enrollees.
The Standards of Review relevant to the issues identified by MMA are set forth above. BCBSME has made only the conclusory statement that none of the cited Standards of Review are applicable or relevant to the issues presented. It is not clear to MMA what is the nature or import of the reference by BCBSME to the deference made to administrative decisions. MMA is aware of the tradition of providing such deference and has no problem with the principle. The response of MMA, to the objections of Anthem to the issues statement concerning the ability of BCBSME to remain in business without the proposed acquisition by Anthem, is set forth above.
MMA asserts that statements of issues are presentations of questions to be addressed in a judicial proceeding or an administrative review proceeding such as this review proceeding. There may be multiple questions to review in analyzing the facts of the proposed transactions against any Standard of Review, and it should not be required that each individual issue be determinative of the question whether a Standard of Review has been satisfied. The questions presented by MMA are relevant to one or more of the Standards of Review and should be recognized as questions to be addressed and considered in determining whether or not the Standards of Review have been satisfied. Efforts to eliminate consideration of the issues before the presentation of evidence and closing arguments is inappropriate.
For the reasons stated, MMA respectfully requests that the Superintendent deny and dismiss Applicants Objections.
Dated: March 16, 2000
Michel A. LaFond
Sulloway & Hollis, P.L.L.C.
Attorney for Maine Medical Association
9 Capitol Street, Box 1256
Concord, New Hampshire 03302-1256
603-226-2405 - fax
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on March 16, 2000 a copy of Maine Medical Associations Response to Applicants Objections to Intervenors Designation of Issues was served via United States mail, first class postage prepaid, on each of the persons listed below.
Robert S. Frank, Esq. Michele M. Garvin, Esquire
Harvey & Frank Ropes & Gray
Two City Center One International Place
P.O. Box 126 Boston, Massachusetts 02110-2624
Portland, Maine 04112 e-mail: Mgarvin@Ropesgray.com
fax - 207-775-5639 (Central Maine Healthcare Corporation;
e_mail: email@example.com Central Maine Partners Health Plan)
(Blue Cross/Blue Shield of Maine)
Judith Chamberlain, Esq. Robert I. Goldman
State of Maine Maine Counsel of Senior Citizens
Department of the Attorney General 27 Bowery Beach Road
6 State House Station Cape Elizabeth, Maine 04107
Augusta, Maine 04333_0006 e-mail: Rgoldma1@maine.rr.com
e_mail: firstname.lastname@example.org (Maine Council of Senior Citizens)
(Bureau of Insurance)
William H. Laubenstein, Esq. Executive Director of the Maine Ambulatory
State of Maine Care Coalition
Department of the Attorney General P. O. Box 390
6 State House Station Manchester, Maine 04351
Augusta, Maine 04333_0006 e-mail: email@example.com
e_mail:firstname.lastname@example.org (Sacopee Valley Health Center, Regional
(Office of the Attorney General) Medical Center at Lubec, Eastport Health
Care, Inc., and the Maine Ambulatory
Gregory A. Brodek, Esq. Care Coalition)
Duane, Morris & Heckscher, LLP
15 Columbia Street, 4th Floor John Dieffenbacher-Krall
Bangor, Maine 04401_6355 Executive Director
e_mail: email@example.com Maine Peoples Alliance
(Maine Health Alliance) 192 State Street
Portland, Maine 04101
(Maine Peoples Alliance)
Joseph P. Ditre, Esq. Gordon H. Smith, Esquire
Consumer Health Law Program Maine Medical Association
One Weston Court, Level One 30 Association Drive
P.O. Box 2490 P. O. Box 190
e_mail: firstname.lastname@example.org Manchester, Maine 04351
(Consumers for Affordable Health Care e-mail: email@example.com
Foundation/Coalition) (Thomas D. Hayward, M.D.,
Maroulla S. Gleaton, M.D. and the
Donald E. Quigley, Esquire Maine Medical Association)
465 Congress Street, Suite 600 mailto:Mgarvin@Ropesgray.commailto:Rgoldma1@maine.rr.commailto:firstname.lastname@example.org:MPA@gwi.netmailto:email@example.comKellie P. Miller, M.S.
Portland Maine 04101_3537 Executive Director
e_mail: firstname.lastname@example.org Maine Osteopathic Association
(Maine Medical Center) 693 Western Avenue
Manchester, Maine 04351
Sandra L. Parker, Esq. e-mail: email@example.com
Attorney for MHA, Inc. (Maine Osteopathic Association)
150 Capitol Street
Augusta, Maine 04330 Edward Miller
e_mail: firstname.lastname@example.org Executive Director
(MHA, Inc.) American Lung Association of Maine
122 State Street
James B. Zimpritch, Esquire Augusta, Maine 04330
Jeffrey M. White, Esquire e-mail: email@example.com
Catherine R. Connors, Esquire
Pierce Atwood mailto:firstname.lastname@example.org
One Monument Squaremailto:email@example.com:firstname.lastname@example.orgPortland, Maine 04101
(Anthem Insurance Companies, Inc.)
Michel A. LaFond, #8932
Sulloway & Hollis, P.L.L.C.
9 Capitol Street, Box 1256
Concord, New Hampshire 03302-1256
Attorneys for Maine Medical Association
Last Updated: January 21, 2014
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