Pursuant to Order of the Superintendent of Insurance of February 23, 2000, the following parties timely filed and appropriately served a Designation of Issues: Central Maine Healthcare Corporation (CMHC), the Maine Attorney General, the Maine Medical Association (MMA), Maine Ambulatory Care Coalition (MACC), the Maine Hospital Association, Inc. (MHA), and Consumers for Affordable Health Care Coalition (CAHC) and Maine Council of Senior Citizens (MCSC). Anthem and Blue Cross and Blue Shield of Maine (BCBSME) subsequently filed Objections to Intervenors’ Designations of Issues, to which MMA responded on March 16, 2000 with its Response to Applicant’s Objections to Intervenors’ Designation of Issues.

Deputy Superintendent Cioppa has duly considered the issues designated by these parties, and the objections raised by Anthem and BCBSME. In ruling on the objections, the Deputy Superintendent is mindful of the Superintendent’s prior determination that the purpose for such designations "…is for the parties to focus the attention of the Superintendent on specific issues that fall clearly within the 26 issues identified in the Notice of Hearing [of November 5, 1999]." (See Order of February 23, 2000). Accordingly, the Deputy Superintendent rules as follows:

1. Anthem/BCBSME’s objection to MMA issue 3 entitled "Commercial Insurance Market" is sustained as irrelevant.
2. Anthem/BCBSME’s objection to MMA issue 4 entitled " Anthem East" is overruled as relevant to a number of issues set forth in the Notice of Hearing, including (1), (4), (8), (19), and (20).
3. Anthem/BCBSME’s objection to MMA issue 8 entitled "Integration" is overruled as relevant to a number of issues set forth in the Notice of Hearing, including (1), (4), (8), (19), and (20).
4. Anthem/BCBSME’s objection to MMA issue 5 entitled "Provider Agreements" is sustained as irrelevant.
5. Anthem/BCBSME’s objection to MMA issue 6 entitled "Lack of Data Management Systems" is sustained as irrelevant as that issue is put forth by the MMA. However, questions as to data management systems utilized for business purposes, regionalized efforts and the ability to manage care are relevant inquiries.
6. Anthem/BCBSME’s objection to MMA issue 9 entitled "Payments to Providers" is sustained as irrelevant.
7. Anthem/BCBSME’s objection to MMA issue 1 entitled "Access to Capital" is overruled as relevant to issue (1) set forth in the Notice of Hearing.
8. Anthem/BCBSME’s objection to MMA issue 10 entitled "Transfer of Capital" is sustained as irrelevant.
9. Anthem/BCBSME’s objection to MHA issue 2, relating to whether Anthem Parent should be required to guarantee satisfactory performance of all insurance and provider contracts and other obligations of Anthem Blue Cross Blue Shield, is overruled as relevant to issue (1) set forth in the Notice of Hearing.
10. Anthem/BCBSME’s objection to MHA issue 3, relating to whether Anthem should be prohibited or limited in its ability to upstream or transfer Maine resources to other states, is sustained as irrelevant.
11. Anthem/BCBSME’s objection to MHA issue 4, relating to whether Anthem should be required to continue distinct contracts with distinct providers, is sustained as irrelevant.
12. Anthem/BCBSME’s objection to MHA issue 5, relating to whether Anthem should be required to continue certain provider contracting practices of BCBSME, is sustained as irrelevant in terms of specific inquiry into whether Anthem should be required to continue Maine Blue Cross Blue Shield’s practice of maintaining a statewide network of providers consistent with historic levels of participation; but it is overruled with respect to specific inquiry into whether Anthem should be required to continue Blue Cross Blue Shield’s practice of providing periodic interim payments (PIP) consistent with the timing and methodology historically utilized by Blue Cross Blue Shield; and whether Anthem should follow Maine Blue Cross Blue Shield’s established procedures for defining, processing and paying "clean claims."
13. Anthem/BCBSME’s objection to MHA issue 6, relating to whether Anthem should be required to maintain BCBSME access and prevention initiatives, is sustained as irrelevant.
14. Anthem/BCBSME’s objection to MHA issue 7, relating to whether Anthem should be required to continue to offer a full range of individual and small group products, is overruled as relevant to various issues set forth in the Notice of Hearing, including (1) and those relating to service and protection provided by Anthem to policyholders.
15. Anthem/BCBSME’s objection to MHA issue 8, relating to whether "most favored nation" requirements should be prohibited in Anthem provider contracts, is sustained as irrelevant.
16. Anthem/BCBSME’s objection to MHA issue 10, relating to whether the public should have more opportunity for input and scrutiny of financial analysis, is sustained, inasmuch as this is not an appropriate issue for hearing, but a matter of discretion for the Superintendent.
17. Anthem/BCBSME’s objection to MHA issue 11, relating to whether the Bureau of Insurance should consider alternative valuation methodologies, is sustained as irrelevant.
18. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 1 is sustained as repetitive of issue (1) set forth in the Notice of Hearing, and overly broad as to its numerous and incomplete subparts.
19. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 2, relating to whether Applicants’ representations in the Hart-Scott-Rodino filing are accurate, is sustained as irrelevant.
20. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 3 is sustained as repetitive of issue (4) set forth in the Notice of Hearing, and overly broad as to its various and incomplete subparts
21. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 4 is sustained as repetitive of issue (8) set forth in the Notice of Hearing, and overly broad as to its numerous and incomplete subparts.
22. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 5 is sustained as repetitive of issue (9) set forth in the Notice of Hearing.
23. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 6 is sustained as repetitive of issue (10) set forth in the Notice of Hearing, and overly broad as to its various and incomplete subparts.
24. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 7 is sustained as repetitive of issue (16) set forth in the Notice of Hearing, and overly broad as to its various and incomplete subparts.
25. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 8 is sustained as repetitive of issue (17) set forth in the Notice of Hearing, and overly broad as to its various and incomplete subparts.
26. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 9 is sustained as repetitive of issues (19) and (20) set forth in the Notice of Hearing, and overly broad as to its numerous subparts.
27. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 10, relating to whether the consideration paid by Anthem to Patriot Mutual for Patriot’s equity interest in Machigonne should be allowed as a deduction from the amount of money that will go the charitable trust, is overruled.
28. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 11, relating to whether the Change of Control Compensation Agreements between BCBSME and officers of BCBSME grant an economic benefit to officers in violation of the statute, is overruled.
29. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 12, relating to whether deducting the cost of insuring the pre-closing Medicare liabilities of BCBSME from Total Consideration is inconsistent with the charitable trust plan or would adversely affect the distribution of BCBSME’s value, is overruled.
30. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 13, relating to

    whether the conversion plan violates applicable law by requiring amendments to the charters of two HMO subsidiaries to remove all charitable purposes of those entities, is overruled.

31. Anthem/BCBSME’s objection to CAHC’s and MCSC’s issue 14, relating to whether the appraisal of Houlihan, Lokey, Howard & Zufkin satisfies the provisions of 24 M.R.S.A. §2301(9-D)(I), is overruled.

PER ORDER OF THE DEPUTY SUPERINTENDENT

 

 

 

DATED: March 22, 2000

ERIC A. CIOPPA

Deputy Superintendent of Insurance