Health insurer fine with Mich. AG's investigation
LANSING, Mich. (Legal Newsline) - Blue Cross Blue Shield of Michigan says it will work with state Attorney General Bill Schuette regarding its planned investment in one of the country's largest Medicaid companies.
BCBSM and Philadelphia-based Independence Blue Cross announced their partnership on Aug. 9.
The two plan to invest in AmeriHealth Mercy Family of Companies, which currently provides Medicaid managed care services in Pennsylvania, Indiana, Kentucky, South Carolina and New Jersey.
Following regulatory reviews and approvals, AmeriHealth Mercy will be majority-owned by IBC, with BCBSM holding a minority interest.
The move will allow the two companies to expand into the national Medicaid market, they say.
Schuette announced Thursday that his office is reviewing the proposed transaction, which could involve up to $215 million in BCBSM's subscriber funds.
"We have a responsibility to ensure this substantial transaction conforms to state law and is in the best interest of Blue Cross rate payers and Michigan taxpayers," Schuette said in a statement.
In a letter sent to BCBSM counsel, Schuette's office requested documentation related to the transaction, including: all documents filed with state and federal regulators; purchase agreements; independent valuation opinions; articles of organization and other documents related to the governance of the new AmeriHealth Mercy "holding company;" and BCBSM board minutes and resolutions.
Schuette asked for the information to be provided within 10 days.
Andrew Hetzel, vice president for corporate communications, said Friday that BCBSM welcomes the attorney general's inquiry.
"We intend to work collaboratively with Attorney General Schuette to ensure that his questions are answered and that Blue Cross affirms the tremendous value of this new business venture to the people of Michigan," he said in a statement.
"AmeriHealth Mercy is long-established in serving Medicaid consumers and state governments that administer Medicaid programs, with more than 25 years of experience. The company's experience and capabilities were significant factors behind our board's approval of a transfer of funds from our investment portfolio to purchase a minority share and capitalize the business."
BCBSM says it believes its minority interest in AmeriHealth Mercy "delivers tremendous value" to Michigan residents.
"Our investment in AmeriHealth Mercy will enable Blue Cross to meet the needs of Medicaid consumers and the taxpayers of the state of Michigan, as Medicaid grows over the coming years, with industry-leading service and superior financial stability," Hetzel said.
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.
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