Judge upholds sale price of Blues; consumer group to appeal

A Kennebec County Superior Court judge has ruled against the state’s attorney general and a consumer advocacy group in concluding that the superintendent of insurance acted appropriately when he approved an $81.5 million sale price for the nonprofit Blue Cross Blue Shield of Maine.

Justice Donald H. Marden wrote in a Dec. 21 decision that he was satisfied that Superintendent Alessandro Iuppa “examined all of the evidence required by statute” in making a determination of how much Anthem Insurance Cos. of Indiana should pay for the health insurance company.

“I’m very pleased,” Iuppa said Thursday. “I think it clearly indicates that the actions we took here [relative to putting a price on the company] were appropriate.”

In April 2000, Iuppa ruled after lengthy testimony that the value of the Blues was significantly below the original $120 million sale price that Anthem had agreed to pay in 1999. Iuppa upheld Blue Cross calculations that had dropped the proposed sale price because of the company’s $17.3 million loss in 1999.

The Attorney General’s Office is still reviewing the decision and weighing whether to appeal, said William Laubenstein, an assistant attorney general.

Consumers for Affordable Health Care will appeal, said Joseph Ditre, the group’s executive director.

“We’re definitely going to appeal it because, with all deference to the judge, we think he erred in his decision,” Ditre said.

He said the superintendent’s method in approving the lower sale price was “just clearly in error.” The superintendent allowed expenses to be counted twice, Ditre said. Some that were counted for the July 1999 valuation that served as the basis for the original Blues sale price were counted again for calculations that reduced the sale price by more than $20 million, he said.

The Attorney General’s Office had argued that using the 1999 valuation as a basis for calculations was improper because market and business conditions changed significantly in the months after the valuation. The suit asked the court to adjust the sale price if it found a discrepancy.

The money from the sale went into a trust for underinsured and uninsured Mainers.