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STATE OF MAINE
Alessandro A. Iuppa, Superintendent of the Maine Bureau of Insurance, issues this Decision and Order on the application for approval by Anthem Health Plans of Maine, Inc., d/b/a Anthem Blue Cross and Blue Shield, (“Anthem BCBS”) and Maine Partners Health Plan, Inc. (“MPHP”) (collectively, the “Applicants”) in the above-captioned proceeding.
This matter is before the Superintendent upon the application by Anthem BCBS for approval, pursuant to 24-A M.R.S.A. §§ 222 and 3474, of an Agreement and Plan of Merger with MPHP. The Agreement and Plan of Merger provides that Anthem BCBS and MPHP will merge as of the close of business on December 31, 2004, subject to the prior approval of the Superintendent. The surviving corporation will be Anthem BCBS. Unanimous written consents of the Board of Directors of Anthem BCBS and MPHP authorize the merger. Upon the effective date of the merger, the MPHP Board of Directors will cease to exist.
If the merger is approved, Anthem BCBS will assume all of MPHP’s rights, liabilities and obligations. For MPHP group members, following the merger Anthem BCBS will furnish uninterrupted HMO and POS coverage under their existing certificates of coverage which will remain in force until renewal in 2005. At renewal in 2005, Anthem BCBS will offer comparable replacement coverage in Anthem BCBS products to these groups as required by law. For MPHP individual members, those HMO members enrolled in either the Standard or Basic plan will be offered both the corresponding Anthem BCBS HMO Maine Standard or Basic plan and any other individual product Anthem BCBS offers. Anthem BCBS would transition MPHP individual members to an Anthem BCBS individual product on January 1, 2005, contingent on the merger effective date and the 60-day notice requirement period. Anthem BCBS asserts that there will be no rate impact in this transition for MPHP individual members.
Anthem BCBS asserts that with respect to all MPHP covered medical services, the primary care, specialty, ancillary and hospital provider networks for Anthem BCBS’s products, including HMO Maine and HMO Choice, include the providers in the current MPHP network, and are more extensive. Thus, Anthem BCBS asserts, the proposed transaction will not result in any disruption in networks for MPHP members and members will have more choice of participating providers.
With respect to behavioral health care, under the proposed transaction
MPHP group members will continue to receive services through the existing
network until their renewal in 2005. Once groups renew on Anthem BCBS
products in 2005, their members will access behavioral health services
through Anthem BCBS’s statewide network. As of the date MPHP individual
members become effective on an Anthem BCBS product, these members will
also access behavioral health services through Anthem BCBS’s statewide
network. Anthem BCBS’s behavioral network is equal to or more extensive
than MPHP’s in all Maine counties except Cumberland County where
it is somewhat smaller. Anthem BCBS has described its’ efforts to
expand the behavioral health network in Cumberland County by aggressively
seeking to contract with MPHP network providers not currently under contract
with Anthem BCBS. Pharmaceutical network services for MPHP members will
not change as a result of the proposed merger.
II. PROCEDURAL HISTORY
On September 23, 2004, Anthem BCBS submitted an application for approval, which was supplemented with additional materials on October 1, 2004.
On September 30, 2004, the Superintendent issued a Notice of Pending Proceeding and Hearing which, among other matters, set October 19, 2004 as the intervention deadline, set November 18, 2004 as the date for public hearing, and identified the various issues to be considered by the Superintendent at the public hearing. No persons filed applications to intervene as parties in the proceeding.
On November 15, 2004, as supplemented on November 17, 2004, Anthem BCBS submitted the pre-filed testimony of witnesses Dennis Hagemann, Erin Hoeflinger, Harry Page, and James Parker.
On November 18, 2004, the Superintendent issued a Protective Order providing confidential treatment to certain identified material.
The hearing was held on November 18, 2004. Anthem BCBS representatives appeared and participated in the hearing. No other persons, personally or through counsel or other representative, appeared at or participated in the hearing.
III. STANDARD OF REVIEW
After conclusion of the hearing on the application for approval, the Superintendent is required to issue a decision on the application within thirty days. In making his decision, 24-A M.R.S.A. §§ 222(7)(A) and 3474(2) require that the Superintendent’s determination include consideration of the following legal standards of review:
IV. FINDINGS OF FACT and CONCLUSIONS OF LAW
At the hearing held on November 18, 2004, the Superintendent admitted into the record certain documentary and testimonial evidence. Testimonial evidence was presented in a panel format by Anthem BCBS witnesses Denis Hagemann, Network Manager; Erin Hoeflinger, Vice President of Sales; Harry Page, Finance Account Executive; and James Parker, Vice President and General Manager. A brief summary regarding these witnesses and the subject matter of their testimony is as follows:
Documentary evidence is comprised of Applicants’ Exhibits C-1, 1 through 6, and C-7, as supplemented.
Based on the testimonial and documentary evidence presented at the hearing, and upon a review of the record of this proceeding, the Superintendent finds that no issues of material concern exist with respect to the Applicants’ abilities to satisfy the legal standards for approval set forth in 24-A M.R.S.A. §§ 222(7)(A) and 3474(2), summarized as follows:
For all of the foregoing reasons, the Superintendent concludes that the Applicants’ have met the legal standards for approval set forth in 24-A M.R.S.A. §§ 222(7)(A) and 3474(2).
The application of Anthem Health Plans of Maine, Inc., d/b/a Anthem Blue Cross and Blue Shield, and Maine Partners Health Plan, Inc. for approval of an Agreement and Plan of Merger is APPROVED. Anthem BCBS shall notify MPHP certificateholders of the completion of this merger by mailing to each certificateholder the Certificate of Amendment attached hereto. The Certificate of Amendment shall be mailed to MPHP certificateholders in lieu of the Certificate of Assumption included in Appendix E of the Applicants’ initial consolidated filing.
VI. NOTICE OF APPEAL RIGHTS
This Decision and Order is a final agency action of the Superintendent of Insurance within the meaning of the Maine Administrative Procedure Act. It may be appealed to the Superior Court in the manner provided by 24-A M.R.S.A. § 236, 5 M.R.S.A. § 11001, et seq. and M.R. Civ. P. 80C. Any party to the proceeding may initiate an appeal within thirty days after receiving this notice. Any aggrieved non-party whose interests are substantially and directly affected by the Decision and Order may initiate an appeal within forty days of the issuance of the decision. There is no automatic stay pending appeal; application for stay may be made in the manner provided in 5 M.R.S.A. § 11004.
PER ORDER OF THE SUPERINTENDENT OF INSURANCE
Last Updated: August 22, 2012
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