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Maine.gov > PFR Home > Insurance Regulation > Hearing Decision Index > Document 695 : INS 99-14 : Hearing Decision

STATE OF MAINE
DEPARTMENT OF PROFESSIONAL AND FINANCIAL REGULATION
BUREAU OF INSURANCE

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  )

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IN RE: APPLICATION OF ANTHEM HEALTH PLAN OF MAINE, INC., TO ACQUIRE THE ASSETS OF ASSOCIATED HOSPITAL SERVICE OF MAINE, d/b/a BLUE CROSS AND BLUE SHIELD OF MAINE, AND RELATED TRANSACTIONS

Docket NO. INS 99-14 (CONSOLIDATED)

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MHA, INC.’s RESPONSE TO ANTHEM’S OBJECTIONS TO MHA PREFILED TESTIMONY

 

 

 

 

 

April 5, 2000

 

NOW COMES MHA, Inc. (MHA) and hereby responds to the Objections of Anthem to the MHA Prefiled Testimony, dated April 3, 2000.

MHA has three points:

  1. It seeks to clarify the nature of the agreement Attorney Doyle entered into with Anthem Counsel;
  2. It seeks to modify the listing of "disagreed" testimony to include those portions of its prefiled testimony that relate to the "statewide network" issue;
  3. It provides argument for acceptance of the testimony categorized as "disagreed".

Particulars of MHA – Anthem Agreement and Desired Rulings

First, MHA clarifies the extent and character of its procedural agreement with Anthem to avert any misunderstanding that may arise from the following characterization of that agreement appearing at page 1 of the Anthem Objections:

Attorney Doyle agreed that certain of the MHA testimony (including all of the testimony from witnesses Cluchey and Meehan) is inadmissible and suggested that the irrelevant testimony be treated as an offer of proof of what the witness would have said about the various topics.

The agreement did not amount to a concession of inadmissibility but rather to a procedural simplification acknowledging that exclusion of the evidence would logically follow from prior rulings, although MHA continues to take exception to those rulings and consequently seeks to preserve a record of the offered proof. Attorney Doyle stressed in his discussions with Anthem counsel preceding this filing that his agreement in behalf of MHA had several key elements:

  • MHA would enter a procedural agreement through which portions of the MHA Prefiled testimony would be assigned to either of two categories;
  • The first category, "agreed upon," described excerpts from MHA’s prefiled evidence that MHA acknowledged to be directly relevant only to MHA issues previously excluded from the case by ruling of the Superintendent. Such evidence would be handled as follows:
    • Anthem would object to the pertinent portions of prefiled testimony as being inadmissible on the basis of the Deputy Superintendent’s Order of March 22 and the Superintendent’s Order of March 28 that deemed several MHA issues to be "irrelevant";
    • MHA would acknowledge that these pieces of testimony relate directly to, and advocate in favor of, MHA issues already deemed irrelevant;
    • MHA would still offer the full prefiled testimony as an "offer of proof" as testimony in support of the issues that have now been precluded under the two Orders;
    • MHA would thereby preserve for purposes of the record, both its exception to the prior Orders on relevance, and the testimony it was prepared to offer but for these rulings.
    • The Parties and the Superintendent would thereby have saved considerable time for argument in front of the Superintendent through this categorization;
    • MHA would accept a ruling from the Superintendent that this category of testimony was not admissible subject to all of the preceding;
  • The second category of testimony, "disagreed," described portions of MHA testimony viewed by Anthem as logically excluded as a result of prior procedural rulings limiting the issues, but with respect to which MHA identified relevancy to issues that remain in the case. These excerpts would be treated differently:
    • MHA will contend testimony in this category should be admissible as relating to other MHA issues that were not excluded by the Superintendent’s rulings, or relating to other permitted areas of inquiry raised by the parties or within the scope otherwise defined by notices and orders issued by the Superintendent.
  • Accordingly, when MHA presents its prefiled testimony, it expects that:
    • MHA will submit the "agreed-upon" category of testimony, by reference thereto in the filings, as an "offer of proof", subject to the preceding articulated steps.
    • That the Superintendent will rule the portions of testimony assigned to such category to be inadmissible as directly relating to issues he has deemed irrelevant in his orders of March 22 and March 28.
    • That MHA takes exception to the Superintendent’s prior orders, resting on the arguments it raised previously in its filings of March 24 and March 3 but not rearguing the points at hearing.

Thus MHA has not agreed that these portions of its evidence are inadmissible but rather has agreed to a streamlined process of acknowledging the logical outcome of prior procedural rulings to which it takes exception, while preserving a record of its offered evidence. With this nuance, MHA acknowledges its "agreement" on the pieces of testimony so listed in Anthem’s April 3 filing, with exception to those categories of testimony that relate to the "statewide network" issue.

New Basis for Acceptance of MHA Testimony on "Statewide Network"

Second, MHA withdraws from the "agreed" category those pieces of its prefiled testimony that relate to the statewide network issue. These pieces of testimony, as described by Anthem, are as follows:

Testimony of Kevin Behre From p.12 beginning with "In addition to the claims processing . . ." through p.13, ending with " . . . it affects other areas of the State." MHA’s issue 5, seeking to impose a statewide network requirement, was deemed irrelevant in the Superintendent’s March 22 order and then again in the Superintendent’s order on MHA’s motion for reconsideration. MHA now disagrees.
Testimony of Dana Kempton From p.16, ln.3 through p.18, ln.3 MHA issue 5, statewide network, was deemed irrelevant in 3/22 order and again in order on reconsideration MHA now disagrees.
Testimony of William Diggins From p.9, ln.1 through p.9, ln. 26 MHA issue 5, statewide network, was deemed irrelevant in 3/22 order and again in order on reconsideration MHA now disagrees.

As to these particular portions of testimony, MHA asserts that notwithstanding the Superintendent’s prior rulings, they are relevant to the ongoing proceedings for a variety of reasons.

Counsel for Anthem has expressly referenced the maintenance of the statewide network in the course of his opening statement as a positive indicia of Anthem’s worthiness to attain a certificate of authority.

Superintendent Iuppa himself has questioned Mr. Ryan regarding the impact on BCBSME when results were not as strong as projected. Mr. Ryan noted that the Board was shocked and dismayed when reserves were falling, and that it was "struggling to keep a statewide network in place".

Superintendent Iuppa directed questions to Karen Foster of Blue Cross regarding the maintenance of the existing provider contracts and the particular impact this might have on rural areas. In this rural context, he asked Ms. Foster "what efforts [Blue Cross] had made if any, to assure that the network will be adequate". She responded that "Anthem is aware of this" and that she "would not expect" Anthem to make changes.

Given this record, the issue of maintenance of an adequate statewide network, and Anthem’s commitment to this, has now been brought directly into this proceeding by Anthem, Blue Cross and the Superintendent. As a matter of fundamental fairness and to assure proper procedure, MHA should also be permitted to offer its own testimony on this point.

Accordingly, in light of these developments which took place at Monday’s hearing, the MHA will request the Superintendent to rule explicitly on the admissibility of MHA’s evidence on the statewide network issue.

Bases on which Superintendent should Accept Other Testimony in the "MHA Disagrees" Category

The Anthem filing references three issues as "MHA disagrees". In further supplement to the arguments in its filings of March 3 and March 24, MHA offers the following argument in support of its view that such evidence is properly admissible, notwithstanding the March 22 and March 28 rulings. For ease of reference, it will provide the following excerpts from the Anthem Objections:

Behre (MHA) From p.8 beginning with "Can you provide further background . . . through p.9 ending with the sentence " . . . thereby effectively countering any control that might otherwise be exercised over the in-State entity." MHA issue 3, dealing with capital transfers, is irrelevant per the Superintendent’s March 22 order. Although located in the "guarantee payments" section, this testimony is really focused on the capital transfer issue. MHA disagrees.

 

MHA notes that Mr. Behre is describing various ways intercompany transfers can take place in a parent/subsidiary situation. He states that absent some set of regulatory protections, solvency of the carrier is threatened. Mr. Behre’s statements here are, therefore, supportive of MHA’s Issues 1, 2 and 9, seeking to assure that obligations to providers and enrollees will be met notwithstanding solvency problems on the part of the Maine operating company subsidiary.

Behre Testimony From p.19, beginning with "Anticipating that Anthem would argue . . ." through p.20 ending with " . . .we’ve had with Blue Cross historically." Deals with capital transfer issue. Irrelevant per 3/22 order. MHA disagrees.

MHA disagrees that this is irrelevant. Rather, it is relevant and pertinent to MHA’s Issue No. 9, seeking to establish particular reserve and surplus requirements to ensure payment of provider obligations.

Kempton (MHA) From p.9, ln.15 through p.9, ln19 Relates to capital transfer issue. MHA disagrees.

MHA disagrees with Anthem’s characterization – and views this testimony to be relevant to MHA Issues 1, 2 and 9, which continue to be part of the case.

WHEREFORE, MHA prays for rulings consistent with the preceding points and legal argument.

DATED: April 5, 2000

 

______________________________ _____________________________

Sandra L. Parker, Esq. Esq. John P. Doyle, Jr., Esq.

Attorney for MHA, Inc. Attorney for MHA, Inc

MHA, Inc. PRETI, FLAHERTY, BELIVEAU,

150 Capitol Street PACHIOS & HALEY, LLC

Augusta, Maine 04330 One City center

e-mail: sparker@themah.org P.O. Box 9546

Portland, Maine 04112-9546

(207) 791-3000

jdoyle@preti.com

 

CERTIFICATE OF SERVICE

The undersigned hereby certifies that on April 5, 2000, a copy of MHA, INC.’s RESPONSE TO ANTHEM’S OBJECTIONS TO MHA PREFILED TESTIMONY was served via hand delivery, regular mail or electronic mail on each of the persons listed below.

 

Jeffrey M. White, Esq.

Catherine R. Connors, Esq.

PIERCE ATWOOD
One Monument Square

Portland, Maine 04101

(207) 791-1100

(Anthem Insurance Companies, Inc )

Robert S. Frank, Esq.

HARVEY & FRANK

Two City center, Fourth Floor

Portland, Maine 04101

(207) 775-1300

(Blue Cross and Blue Shield of Maine)

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)

 

Gregory A. Brodek, Esq.

Duane, Morris & Heckscher, LLP

15 Columbia Street, 4th Floor

Bangor, Maine 04401-6355

e-mail: gabrodek@duanemorris.com

(Maine Health Alliance)

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)

Robert I. Goldman

Maine Council of Senior Citizens

27 Bowery Beach Road

Cape Elizabeth, Maine 04107

e-mail: Rgoldma1@maine.rr.com

(Maine Council of Senior Citizens)

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)

Michel Lafond, Esq.

Sulloway & Hollis

P.O. Box 1256

Concord, New Hampshire 03302-1256

mal@sulloway.com

(co-counsel for 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.

Attorney for MHA, Inc.

150 Capitol Street

Augusta, Maine 04330

e-mail: sparker@themha.org

(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)

 

Edward Miller

Executive Director

American Lung Association of Maine

122 State Street

Augusta, Maine 04330

e-mail: emiller@mainelung.org

(American Lung Association of Maine)

 

 

DATED: April 5, 2000

_____________________________

John P. Doyle, Jr., Esq.

Attorney for MHA, Inc.

PRETI, FLAHERTY, BELIVEAU, PACHIOS & HALEY, LLC

One City center

P.O. Box 9546

Portland, Maine 04112-9546

(207) 791-3000

 

JPD\G:\MHA\2000\ANTHEM\MHA ResponsetoAnthemObjtoMHATestimony.doc (April 4, 2000 5:19 PM)

Last Updated: March 27, 2012