I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
Blue Cross Blue Shield of New Mexico Friday petitioned the state Supreme Court to block acting insurance superintendent Johnny Montoya‘s suspension of a controversial 21 percent health insurance rate hike.
“This case is about fundamental fairness and adherence to the law,” Blue Cross Blue Shield attorneys wrote in the petition, which described Montoya’s suspension as “unlawful and unconstitutional.”
The company is represented by the Sutin, Thayer and Browne law firm of Albuquerque.
The Independent received no response to a request for comment from Montoya Monday.
Montoya’s suspension of the rate hike approval was “right and necessary,” according to Public Regulation Commission (PRC) commissioner Jason Marks.
An expert hired by the state Attorney General’s office had concluded the rate hike was unjustified and the company had “inflated” its losses. But just a day before a scheduled public hearing on the proposed rate hike, a weekend deal was stuck between the Attorney General’s office, Blue Cross Blue Shield attorneys, and Insurance Division staffers, leading former insurance superintendent Morris “Mo” Chavez to approve a 21.3 percent rate hike.
Marks had denounced that weekend settlement at the time as “a back room deal.”
“Numerous questions were left unanswered when the April hearing was effectively preempted,” Marks told The Independent in an e-mail Monday. “So it is both right and necessary to have an examination of whether the rate increases are justified through a public hearing. If the premium rates they are charging are justified, Blue Cross ought to have no objection to demonstrating that in a public hearing in which their underlying data is presented and questioned.”
Among unanswered questions were “whether appropriate medical expense trend factors were used, “whether it is appropriate for premiums to be raised in order to further contribute to the insurer’s reserves, when they are already several times greater than required,” and “whether their administrative and overhead costs are reasonable and prudent,” Marks wrote.
Blue Cross Blue Shield’s parent company has reserves exceeding $6 billion, Insurance Division records show.
The Insurance Division has approved Blue Cross Blue Shield NM rate hikes every year since 2004, without reviewing documentation supporting the insurer’s claimed expense and loss trends, The Independent has reported.
The PRC asked the Insurance Division to vacate its approval of the agreement last month.
Reversal ‘illegal and improper’
But in its petition to the Supreme Court, Blue Cross Blue Shield NM said it complied with all state health insurance regulations in pursuing the rate hike and negotiated with the Attorney General’s office and Insurance Division in good faith to arrive at the settlement.
Montoya’s vacating of the Division’s approval of the resulting settlement agreement was illegal, the petition states. Blue Cross Blue Shield had previously threatened to sue the PRC if the rate hike was vacated.
“Although BCBSNM advised counsel to the Interim Superintendent of the lack of authority for these actions, the Interim Superintendent has chosen to ignore the law, the participation of the parties that led to the Agreement and the fact that the Superintendent approved the final order and Agreement as it is required to do under New Mexico law,” the petition states.
Even though Montoya’s order vacates the state Insurance Division’s previous approval of the rate hike, it stipulates that policyholders must continue to pay the increased premiums at least until a public hearing scheduled for August.
The Insurance Division has approved Blue Cross Blue Shield NM’s health insurance rate hikes every year since 2004, without requesting documentation supporting the insurer’s claimed losses and expenses, an investigation by The Independent found.
An expert hired by the Attorney General’s office concluded the rate hike was unjustified, partly because Blue Cross Blue Shield NM inflated its financial losses in the rate hike filing to the Division.
Even before Montoya’s order, the agreement was beginning to fray. Jody Neal-Post, the policyholder who originally appealed the rate hike, has since defected from the settlement agreement.
Blue Cross Blue Shield attorneys tried to exclude Neal-Post from settlement negotiations, she has complained and Insurance Division records confirm.
Attorney General’s role unclear
It is unclear whether or not the Attorney General will represent the Insurance Division before the Supreme Court in this case.
Normally, the AG would represent the Insurance Division before the Supreme Court. But the AG’s office helped negotiate the settlement vacated by Montoya, and stands by that settlement, spokesman Phil Sisneros confirmed Monday afternoon.
“We’re on it and are looking into the petition to see what all the options are for us,” Sisneros told The Independent. “It’s got pretty high priority so I’d expect within a week or so. We just got the lawsuit today, really. Nobody had a chance to look at it over the weekend.”
Despite its expert’s conclusion that the rate hike was unjustified, the AG’s office approved the settlement. The AG’s office refused to disclose to The Independent which Blue Cross financial documents its staffers had reviewed prior to signing off on the deal.
