Document 21 : Docket No. 99-14 : Hearing Decision : Bureau of Insurance

STATE OF MAINE

DEPARTMENT OF PROFESSIONAL & 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	)
	)
and	)	Application for Intervention on Behalf of
	)
In re: Application of Anthem Health	)	Thomas D. Hayward, M.D.,
Plan of Maine, Inc., to Acquire the	)
Assets of Associated Hospital Service	)	Maroulla S. Gleaton, M.D., & the
of Maine, d/b/a Blue Cross and Blue	)
Shield of Maine, and Related	)	Maine Medical Association
Transactions	)
	)
Docket No. INS 99-14	)
	)
	)

NOW COME Applicants Thomas D. Hayward, M.D. ("Hayward"), Maroulla S. Gleaton, M.D. ("Gleaton"), and the Maine Medical Association ("MMA"), through counsel, pursuant to the Notice of Pending Proceeding and Prehearing Conference published by the Superintendent of Insurance on September 21, 1999 and 5 M.R.S.A. §§9054(1) and (2), and request that the Superintendent grant them intervenor status in this proceeding based upon the following:

Statement of Facts

1. Hayward is a physician duly licensed by the State of Maine residing in Hampden, Maine and practicing at Sunbury Primary Care in E. Corinth, Maine.

2. Hayward is a participating physician in the managed care provider network of Blue Cross and Blue Shield of Maine ("BCBSME").

3. Hayward is a participating physician in all non-managed care health plans offered through BCBSME as part of the company’s Blue Shield network.

4. Gleaton is a physician duly licensed by the State of Maine residing in Palermo, Maine and practicing at Atlee Gleaton Eye Care in Augusta, Maine.

5. Gleaton is a subscriber in the Maine Medical Association group health plan underwritten by BCBSME.

6. MMA is a professional association of more than 2000 Maine physicians with a place of business in Manchester, Maine.

7. Hayward is the President of MMA.

8. MMA was founded in 1853 to unite and support the physicians of Maine in promoting the health of Maine’s citizens; protecting and promoting the quality of medicine; and supporting the physicians’ function as advocates for their patients. MMA is active in representing the interests of physicians and their patients before the Maine Legislature and regulatory agencies.

9. MMA members participated in the establishment of the Blue Shield plan in Maine in the late 1930’s and have continued to participate in the governance of BCBSME for more than 50 years.

10. MMA members are participating physicians in BCBSME’s network of health service providers and have been participating physicians since the founding of the company.

11. MMA has established for the benefit of its members and staff an association group health plan underwritten by BCBSME.

12. MMA members and staff participate in the MMA group health plan offered through BCBSME.

Memorandum of Law

Because agency adjudications often affect the public interest, administrative law has developed a presumption towards a broad right of intervention. See generally C.H. Koch, Jr., Administrative Law and Practice §5.20(3) (2d ed. 1997). Legal scholars such as Koch and many courts have recognized the importance of public participation in agency proceedings because of agencies’ broad law-defining powers. See Office of Communication of United Church of Christ v. FCC, 359 F.2d 994 (D.C. Cir. 1966), National Welfare rights Organization v. Finch, 429 F.2d 725 (D.C. Cir. 1970).

The Maine Administrative Procedure Act, 5 M.R.S.A. §8001, et seq., provides two avenues for public participation in agency adjudicatory proceedings. In order to be granted intervenor status "as of right," an applicant must demonstrate that "he is or may be, or is a member of a class which is or may be, substantially and directly affected by the proceeding." (emphasis supplied) 5 M.R.S.A. §9054(1). Applicants Hayward, Gleaton, and the MMA all are substantially and directly affected by the potential conversion of BCBSME and acquisition by Anthem Insurance Companies, Inc. ("Anthem").

Hayward and members of the MMA, as participating providers governed by written provider agreements with BCBSME, are involved in an important business relationship with the company, a relationship on which their livelihood often depends. As the largest health insurer in Maine, BCBSME provider agreements are a cornerstone of the financial support of most medical practices in Maine. Accordingly, the Applicants have a great interest in how that contractual relationship might be affected by the proposed transaction.

Furthermore, the Applicants have a second important business relationship with BCBSME which may be affected by the proposed transaction. Gleaton and MMA members obtain health insurance for themselves, their staffs, and their families through the MMA group health plan underwritten by BCBSME.

Finally, MMA represents those physicians who participated in the founding of BCBSME and in its governance for more than 50 years. Physicians were an important class involved in the establishment of the company and remain an important class in the governance of the company today. Physicians deserve to be heard in the review of the potential conversion and sale of a company they helped create.

The Administrative Procedures Act also provides for "permissive" intervention by "any other interested person" in the discretion of the Superintendent. 5 M.R.S.A. §9054(2). The Applicants submit that if the Superintendent does not find that their interests as outlined above meet the standard established in 5 M.R.S.A. §9054(1), their interests are, nonetheless, sufficient to support participation under §9054(2). The Superintendent’s decision-making process will be enhanced by the views of the Applicants on the important issues to be considered in this proceeding.

The Applicants seek the following specific rights provided to other parties to this proceeding:

1. to be represented by counsel;

2. to participate in prehearing conferences;

3. to obtain discovery and copies of filings and notices;

4. to stipulate facts;

5. to present and cross examine witnesses;

6. to make oral and written arguments; and

7. to participate in settlement negotiations.

WHEREFORE, Applicants Thomas D. Hayward, M.D., Maroulla S. Gleaton, M.D., and the Maine Medical Association respectfully request that the Superintendent grant their Application for Intervention in this matter pursuant to 5 M.R.S.A. §9054(1) or, in the alternative, pursuant to 5 M.R.S.A. §9054(2).

Dated at Manchester, Maine October 27, 1999.

_________________________________________

Gordon H. Smith

_________________________________________

Andrew B. MacLean

Attorneys for Applicants Thomas D.

Hayward, M.D., Maroulla S. Gleaton, M.D.,

and the Maine Medical Association

Maine Medical Association

30 Association Drive, P.O. Box 190

Manchester, Maine 04351

207-622-3374

207-622-3332 (Fax)