Published October 2003

Kreidler challenges deadline for Premera decision

By Eric Fetters
Herald Business Writer

The state insurance commissioner has appealed a judge’s order requiring him to decide by November on the proposed conversion of Premera Blue Cross to a for-profit insurance company.

Mike Kreidler said in September that a 60-day deadline set by Thurston County Superior Court Judge Paula Casey doesn’t give enough time for a thoroughly researched decision and adequate public comment.

He added that he believes Casey’s interpretation of statutes related to the case, known as the Holding Company Act, is incorrect.

“I’m challenging the court’s interpretation of the statute because I don’t believe that a rush to judgment on this important, statewide health-care issue serves the public’s best interest,” Kreidler said in the announcement of his appeal. “There just isn’t enough time for meaningful public involvement under the 60-day schedule.”

Mountlake Terrace-based Premera pointed out that its conversion request initially was filed with the insurance commissioner nearly a year ago.

“The company has always understood that the state law provides for a 60-day review following the submittal of a complete application,” said Scott Forslund, a spokesman for Premera. “Beyond that, we’ve always been willing to accommodate the commissioner’s desire for a longer review period, while also meeting our rights under the law.”

Forslund said Premera is still willing to extend the deadline to mid-December.

The timetable for reviewing Premera’s conversion plan has been a contentious issue for months. After Kreidler ruled late last year that the law gives him latitude to take more than 60 days, Premera asked the court to review the commissioner’s order. Kreidler and the company also debated for months whether Premera’s application was complete.

Last month, a special master appointed to mediate the process proclaimed Premera’s application to be complete after the insurer turned over some disputed internal documents. At that time, the state set a schedule that called for Kreidler to finish his review within six months.

The judge’s decision to lop four months off that schedule doesn’t give enough time for a proper review of Premera’s request, agreed Cassie Sauer of the Washington State Hospital Association.

“What we think is if the commissioner has to stick to that 60-day deadline, he has to deny Premera’s request,” she said.

Sauer said the conversion issue is too important a change to rush through. Her association, along with a number of other groups representing hospitals, doctors and consumers, have argued that Premera’s transformation could result in less care and higher costs. Two statewide hospital associations have filed suit to keep Premera as a nonprofit.

Founded 58 years ago, Premera is the state’s largest health insurer and one of Snohomish County’s biggest employers. Its executives say that becoming a for-profit company with shareholders will help it raise capital that can improve the insurer’s services and technology.

Premera also is proposing to put all of the company’s initially issued stock into a public health foundation.

While the insurance commissioner is hoping to have the 60-day schedule overturned, his office is proceeding, for now, as if it will stand, spokesman Scott Schoengarth said.

“We asked the court for the quickest response possible” on the appeal, Schoengarth said, “because in the meantime, the clock is ticking.”

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