Jim Beam column: Blue Cross hearing productive

Published 9:08 am Wednesday, February 7, 2024

Louisiana legislators don’t get to vote on whether the state’s Blue Cross and Blue Shield insurance company should be sold to Elevance Health of Indianapolis, but senators on two committees made it clear Tuesday that they do have a voice on the issue.

The Advocate in its report on a marathon, nearly eight-hour hearing said legislators who attended the hearing came prepared with detailed questions about every aspect of the transaction. The newspaper said they returned repeatedly throughout the hearing on Elevance’s track record in other states.

The company has been fined more than $26 million in regulatory fines for violations that included denying coverage of needed medical care, failing to cover preventive services like immunizations and breast cancer screenings, and failing to pay claims in a timely manner.

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Sen. Patrick McMath, a Republican from Covington and chair of the Senate Health and Welfare Committee, said he plans to call a second hearing later in the month, even if it is not until after the state Department of Insurance holds its regulatory hearings on the sale on Feb. 14-15.

“This cake clearly is not baked yet,” McMath said. “After seven-and-a-half hours of testimony we found it difficult to come up with any real substantive advantages to selling our non-profit Blue to a for-profit company.”

McMath added, “There are way too many questions.”

The insurance department will convene those hearings on Ash Wednesday to determine whether the reorganization and sale of Blue Cross is in the best interest of its 1.9 million policyholders and the state has a whole.

The final decision on the sale lies with state Insurance Commissioner Tim Temple and with two-thirds of the Blue Cross members who have voting rights. There are about 95,000 of them out of the 1.9 million policyholders, which is nearly half of the state’s 4.6 million population.

Blue Cross officials in the company’s widespread advertising campaign about the sale have argued that selling to Elevance would offer improved services, a chance to upgrade its technology and would put the insurer on a path for future financial stability.

McMath explained why his committee and the Senate Insurance Committee held the joint hearing.

“This is a very significant deal,” he said. “We felt it was incumbent on us to ask the questions.”

The Advocate said legislators are under pressure from constituents both for and against the sale.

The newspaper said some of the new facts that came to light at Monday’s hearing were in a report compiled by the state Department of Insurance that detailed the list of fines of $250,000 or more that Elevance has incurred since 2019 in states around the country.

The report listed a total of 22 fines in seven states, totaling $26.1 million. The largest single fine issued was in California, where the company’s Anthem Blue Cross Partnership plan was fined $11.4 million in 2019 for improperly dealing with more than 48,500 grievance or appeal notices.

The company was fined $5 million in Georgia for failing to adopt procedures for the prompt investigation and payment of claims to policyholders and providers between 2018 and 2021 and was also cited for numerous provider complaints and for claims processing errors.

Louisiana, where Elevance administers the Healthy Blue Medicaid plan, was among the seven states where the company has incurred fines.

The Advocate said Blue Cross officials have previously said that they looked into regulatory issues with Elevance and didn’t find anything that suggested the company was different from other large national insurers.

The newspaper said issues brought up by legislators were on what the sale of the nonprofit company to a for-profit company could do to health insurance premiums in a poor state with the worst health outcomes in the nation; how proceeds from the sale will be divided between a new non-profit foundation, Accelerate Louisiana. that is getting $3 billion and policyholders; and how the voting is being handled.

Republican Gov. Jeff Landry opposed the sale last summer that delayed the sale, but in a speech last week to the powerful Louisiana Hospital Association he praised the benefits of creating the foundation.

The Advocate said it is unclear why Landry, who has no authority over the sale, stipulated that only Pennington Biomedical Research in Baton Rouge can receive research dollars from the foundation that would be created by the sale.

As happens often, Landry’s office didn’t respond to a request for comment.

Sen. Jay Luneau, D-Alexandria, spoke for many Blue Cross policyholders concerned about the sale when he said, “This is alarming. I have real serious concerns about what is going to happen if this deal goes through.”

Jim Beam, the retired editor of the American Press, has covered people and politics for more than six decades. Contact him at 337-515-8871 or jim.beam.press@gmail.com.