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Archive for Saturday, July 20, 2002

Blue Cross won’t get expedited hearing

July 20, 2002

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— The state's largest health insurance company won't have its case heard as quickly as it wants by the state's highest court.

The Supreme Court is reviewing an order issued in February by Insurance Commissioner Kathleen Sebelius rejecting the proposed sale of Blue Cross and Blue Shield of Kansas to Anthem Insurance Cos., of Indianapolis.

In June, a Shawnee County district judge struck down Sebelius' order, a decision she appealed to the state Court of Appeals. The Supreme Court cut about a year's time from the appellate process by taking the case for itself.

But Blue Cross asked the court to move even more quickly to shorten the six-month schedule for submitting briefs to the court and setting arguments.

Without explanation, the Supreme Court denied the Blue Cross request last week.

The denial means the case won't be heard until at least January and a decision won't come earlier than February. Sebelius leaves the insurance commissioner's office in January because she is running for governor in the Nov. 5 general election.

Spokesman Graham Bailey said Friday Blue Cross and Blue Shield was disappointed because, "we'd like to get on with our corporate life."

Bailey said Blue Cross announced its deal with Anthem in May 2001, meaning the process of determining whether the sale can go forward could take two years.

"It creates not the best atmosphere for an insurance company to progress," Bailey said. "We just want to get on with our business."

Assistant Insurance Commissioner Matt All said Sebelius also wanted as quick a resolution as possible but thought the court's decision appropriate.

"We do think this is something that ought to be briefed and considered thoroughly," All said. "This is the last level. This is it."

Under terms of their deal, Anthem planned to pay $190 million to acquire Blue Cross, with at least $142 million of it going to policyholders.

Blue Cross would have distributed $131 million of its existing reserves to policyholders as well, meaning they could have received at least $273 million.

The prospect of Kansas Blue Cross' conversion into an operation of a publicly held, out-of-state corporation drew opposition from many Kansas doctors, hospitals and nurses, as well as an advocacy group for poor and working-class families.

In rejecting the proposed sale, Sebelius said premiums for people insured by Blue Cross would have increased too much if it were purchased by Anthem.

But District Judge Terry Bullock said Sebelius' reasons for blocking the sale weren't good enough under Kansas law.

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