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> Document 591 : INS 99-14 : Hearing Decision
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION BUREAU OF INSURANCE
There are two separate, but related, issues before the Superintendent: whether the Superintendent should reconsider (1) his March 8, 2000 orders ("Expert Witness Orders") prohibiting the presentation of expert testimony by the Maine Medical Association ("MMA"), MHA, Inc. ("MHA"), and Consumers for Affordable Healthcare Coalition ("CAHC") for failure to comply with the Superintendent’s November 4, 1999 Procedural Order requiring submission of expert reports by March 2, 2000, and (2) sustaining certain of Anthem’s objections to the issues designated by MMA, MHA and CAHC ("Issues Order"). Anthem respectfully submits that the Superintendent’s orders were appropriate and unassailable under any circumstances. The fact that, in the face of the Superintendent’s Expert Witness Orders on expert testimony, the intervenors waited more than two weeks to request reconsideration, at this late stage in the proceedings, is inexcusable and is ample, independent, reason to deny the requests out of hand.
A common thread running through the intervenors’ pleadings is that (1) they didn’t know, based on the Superintendent’s orders, that they had to submit expert reports, (2) they didn’t know that there could be a penalty associated with their decision not to produce an expert report by March 2, (3) they didn’t know what an expert report was supposed to consist of, and (4) they were unsure what an "expert" was. The MMA, MHA and CAHC are represented by experienced, competent attorneys. Even a brief review of the Superintendent’s orders reveals the lack of merit to these assertions. In his November 4, 1999 Procedural Order, the Superintendent set forth, inter alia, the schedule for this proceeding, including the deadlines for discovery requests (February 4, 2000) and for submission of expert reports (March 2, 2000). To the extent they would otherwise be unaware, this order gave all parties notice that they had four months to engage expert(s) and submit reports. The Superintendent also gave clear notice in that order of the potential sanctions for failure to comply with any rule or order of the Superintendent:
(Emphasis supplied). During the 5-month-long discovery process, the Applicants answered over 300 multi-part questions, produced thousands of pages of documents, and stockpiled more than six banker boxes full of information in the Augusta repository for review by any party at any time. Because of the thoroughness of the Superintendent’s second discovery request, the vast majority of the relevant documents were produced and available for review by the parties in December, 1999. Nevertheless, only one intervenor (CAHC) even bothered to visit the repository at any point during the discovery period, and the CAHC’s review did not occur until three days before the end of the discovery period. The intervenors’ discovery efforts were no more timely – MHA did not serve any discovery requests, and the MMA filed its first, and CAHC its second, discovery requests at 2:58 p.m. on February 4 – literally two minutes before the end of the 5-month discovery period. Rather than complying with the Superintendent’s order and filing the required expert reports on March 2, the MMA, MHA, and CAHC instead filed last-minute requests (i.e., on March 2) to extend the deadline for filing expert reports. In his orders denying these last-minute requests, the Superintendent formally recognized the importance to Applicants in receiving reports from any intervenor-retained experts that are to testify and the intervenors’ inexcusable delay in providing reports:
(Order Denying MMA Request for Enlargement of Time, dated March 8, 2000) (emphasis added.) In his order denying the MHA’s request for enlargement, the Superintendent addressed in more detail the assertion that expert reports were not filed because the MHA did not know what an expert report was:
(Order Denying MHA’s Request for Enlargement of Time, dated March 8, 2000.) In its motion for enlargement of time to file reports, the CAHC admitted that it did not even have any experts, but asked the Superintendent essentially to extend the deadline for whatever period it might need to obtain the as yet unidentified experts. The Superintendent denied this request. (See Order Denying CAHC’s Request for Enlargement of Time, dated March 2, 2000.) Notwithstanding the Superintendent’s standing orders, when the time came to designate witnesses, the MMA, MHA and CAHC ignored them and named expert witnesses. At that time, the intervenors still had not produced a shred of meaningful information about the opinions their experts had formed, what information had been supplied to these experts, and what the basis was for their opinions. In light of the Superintendent’s orders, and because no meaningful information had been provided, on March 15, Anthem filed a motion to strike the expert witnesses designated by the intervenors.
As another aspect of the Superintendent’s orders to provide meaningful information to the Applicants and to ensure an efficient hearing, the Superintendent ordered the intervenors to designate by March 3 "the specific issues which each intervenor will address." (See Order on Applicants’ Request to Compel at 1.) Because the MMA, MHA and CAHC designations contained irrelevant issues, Anthem objected. On March 22, 2000, the Superintendent sustained many of Anthem’s objections, including those by the MMA and MHA seeking to inject future provider contract negotiations into this proceeding. This order has a direct bearing on the expert witnesses issue because several of the intervenors’ experts purportedly were to testify on the issues that the Superintendent properly has determined are not relevant to this proceeding. For example, the MHA requested leave to file expert testimony and provided the experts’ prefiled direct, but that testimony related to the propriety of most favored nation contract clauses – an issue the Superintendent has deemed is not within the relevant statutory criteria. Thus, if the Superintendent does not overturn his March 22 Issues Order, the MHA’s request for leave to file expert testimony appears moot.
C. Intervenors’ Responses. i. MMA In its objection to Anthem’s motion to strike witnesses, the MMA argues that it designated its expert witnesses on February 25 and a "summary of their expected testimony has been provided." (MMA Objection at 1.) The purported "summary" provides no meaningful information as to the opinion held by any expert or the facts on which any opinion was based. "Identifying" an expert is a meaningless exercise if no opinions or bases therefor are shared. There is now one day before the deadline for filing prefiled testimony, and the MMA has not even submitted any expert report or testimony. MMA argues that "its experts were not engaged to develop any ‘reports.’" (Id. at 2.) This is subterfuge. The Procedural Order required the MMA to file expert reports if it intended to offer expert testimony. If it could avoid giving fair notice of intended expert testimony simply by instructing its experts not to prepare a "report", every party likely would forego generating expert reports, thereby defeating the whole purpose of the disclosure requirement. MMA then suggests that the information it has provided is sufficient because the information is comparable to that provided by Applicants in their witness designations. The detailed expert reports supplied for Houlihan Lokey, Milliman & Robertson, and Salomon Smith Barney, together with the responses to over 300 questions and extensive document production demonstrate the baselessness of this assertion. MMA next asserts that Gordon Smith, one of its attorneys, should be permitted to testify, notwithstanding Maine Bar Rule 3.4 because this is an administrative proceeding and not a jury trial. Rule 3.4 is not limited to jury trials. It is intended to prohibit attorneys from being both witnesses and advocates because there is supposed to be a clear line between "fact" testimony at a hearing, and advocacy statements. Attorney Smith can either represent the MMA as its counsel, or testify as a witness. He cannot do both. ii. MHA MHA requests reconsideration of the Superintendent’s order on two issues: (1) whether Anthem should be required to provide a statewide network of specific providers, and (2) whether Anthem should be prohibited in the future from including most favored nation provisions in its provider contracts. (MHA Motion at 1-2.) Neither issue is within the relevant statutory inquiries. The issues that are relevant to this proceeding concern whether this transaction will have an adverse affect on BCBSME’s policyholders, creditors, contractual obligations, etc. Anthem has repeatedly stated that it intends to assume all of BCBSME’s provider contracts and, accordingly, when the transaction closes, Anthem will inherit the same network of providers that BCBSME currently has. Placing a requirement on Anthem that it maintain, in the future, a pre-specified provider network is not within the statutory parameters and would be discriminatory in that no other insurer in the state has a similar condition. Anthem intends to render quality service to its policyholders in an efficient and cost-effective way. Tying approval of this transaction to maintaining specific providers could inhibit Anthem’s ability not only to provide that service, but to compete in the increasingly challenging healthcare market. Similarly, the Superintendent correctly determined that, at some undetermined point in the future, Anthem may request most favored nation provisions in provider agreements, likewise is not relevant to this proceeding. MHA points to Superintendent Criterion number 2. But this criterion simply asks whether the
(Emphasis supplied). As the emphasized language reveals, this criterion is directed at whether the transaction itself will lessen competition (e.g., if Anthem already had 25% of the market, and was purchasing BCBSME, that would likely result in a lessening of competition in insurance in Maine). This criterion has nothing to do with most favored nation clauses in provider contracts. Moreover, how would the Superintendent decide such an issue today even if it were relevant? There is no specific contract before the Superintendent, and no specific terms to consider. The MHA’s designation of this issue was properly rejected. iii. CAHC CAHC repeats the argument that it didn’t know it had to file an expert report in order to have an expert testify. This requirement is so rudimentary that it need not be further addressed. As noted, what party would commission an expert report if it thought that it could get away with not providing adequate notice of expert opinions as long as no report was generated? CAHC then takes the position that (1) the Superintendent’s March 3 order denying its motion for enlargement of time did not state that CAHC would be prohibited from offering expert testimony, and because of that (2) CAHC assumed that it could designate expert witnesses by March 10. This does not make sense. CAHC, like all parties, was advised of these deadlines months ago, and was also advised of the potential penalties for failure to comply with its obligations as a party. The Superintendent’s orders merely reflect that. Finally, the CAHC’s attempt to summarize one of its expert’s opinions is too little too late. Applicants provided the Houlihan Lokey analysis with the initial consolidated filing, back in September of 1999. The CAHC should not be permitted to disregard the Superintendent’s long-standing orders and submit a summary of Dr. Strong’s opinions three weeks after the due date for expert reports and only two business days before the deadline for prefiled testimony. The CAHC chose to wait until the last moment even to retain experts – they revealed in their March 2, 2000 motion to enlarge the time for filing expert reports that they had not yet retained any experts. In that motion, the CAHC requested until March 17 to file expert reports. In his Order, the Superintendent noted that the CAHC had ample opportunity to engage experts and denied the requested enlargement of time. The CAHC’s present motion offers no additional excuse for this unreasonable delay. Instead, the CAHC seeks to add another 7-10 days of delay on to the already-denied request for enlargement of time. There is no basis for changing the Superintendent’s earlier Order – rather the CAHC’s additional delay in filing any information (i.e., March 24 instead of March 17) provides all the more reason to deny the CAHC’s motion. Moreover, the summary of Dr. Strong’s opinions is just that – a conclusory summary that provides none of the detail or bases for the opinions and, as such, is not amenable to meaningful analysis by the Applicants. CAHC has had months to study the Houlihan Lokey analysis – it would be unfair to give Applicants merely hours to respond to the CAHC’s purported valuation expert. The CAHC’s summary of the expected testimony of Dr. Goldfield is even vaguer. It provides no anticipated opinions, much less the bases therefor. Anthem takes no comfort from the CAHC’s statement that it will provide a more detailed summary of Dr. Goldfield’s testimony on March 27 – one day before Anthem’s prefiled testimony is due. Beyond the fact that the CAHC disregarded the Superintendent’s orders under the guise of misapprehension of what experts are and the need and purpose for expert reports, the reason the CAHC’s experts should not be permitted to testify is because to do otherwise would run directly counter to the purpose of directing parties to file expert reports – to give adequate notice of opinions and the bases therefor sufficiently in advance of the hearing to permit all sides a fair opportunity to prepare. * * * * As the Superintendent determined, the Applicants were entitled to expert information well in advance of the hearing, as required by the Procedural Order. The Order was clear in its requirement for filing expert reports, and counsel should understand the purpose, need for compliance, and ramifications of failure to comply with the order. Permitting the intervenors to offer expert testimony, despite their failure to file expert reports, is fundamentally unfair to the Applicants and would result in substantial and irremediable prejudice to them. The intervenors are not entitled to conduct a hearing by ambush. The Superintendent’s prior orders should be affirmed.
DATED: March 27, 2000
_____________________________ James B. Zimpritch, Esq. Jeffrey M. White, Esq. Catherine R. Connors, Esq. PIERCE ATWOOD Portland, Maine 04101 (207) 791-1100 Attorneys for Anthem Insurance Companies, Inc.
CERTIFICATE OF SERVICE The undersigned hereby certifies that on March 27, 2000 a copy of Anthem Insurance Companies, Inc.’s Opposition to Intervenors’ Motions Regarding Expert Witnesses and Designations of Issues was served by United States mail, first class postage prepaid, email, 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) 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) 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. John Doyle, Jr., Esq. Attorneys for MHA, Inc. 150 Capitol Street Augusta, Maine 04330 e-mail: sparker@themha.org
jdoyle@preti.com (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)
DATED: March 27, 2000
_____________________________ James B. Zimpritch, Esq. Jeffrey M. White, Esq. Catherine R. Connors, Esq. PIERCE ATWOOD Portland, Maine 04101 (207) 791-1100 Attorneys for Anthem Insurance Companies, Inc Last Updated: October 1, 2008 |
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