Lawsuits seek to cut Dirigo payments

Tuesday, November 29, 2005

By PAUL CARRIER, Portland Press Herald Writer

AUGUSTA — Business and insurance groups filed three lawsuits Monday asking judges in Augusta and Portland to overturn $43.7 million in payments that insurers have been ordered to make to expand health-insurance coverage in Maine. The outcome of the lawsuits is important to thousands of Mainers.

The state-sponsored DirigoChoice insurance program will not grow if it loses some of that money, according to Trish Riley of the Governor's Office of Health Policy and Finance, and it will die in 2006 if it loses the full amount.

The program now insures more than 7,000 Mainers. Riley said the $43.7 million would let DirigoChoice cover about 3,000 people who are now on a waiting list, and expand more in the months ahead. Additionally, some of the money would pay for a state watchdog group.

The lawsuits were filed by the Maine State Chamber of Commerce, an insurance trade group and health plans representing auto dealers and bankers. They claim the state insurance superintendent overstated savings that insurers have achieved from health-care reforms that Gov. John Baldacci pushed through the Legislature in 2003.

Specifically, the lawsuits allege that some of the $43.7 million in savings recognized by Insurance Superintendent Alessandro Iuppa are theoretical or prospective, and that other savings may be real but are not attributable to Baldacci's cost-cutting efforts.

In both cases, the lawsuits say, the state should not have used those savings to calculate how much money private insurers must contribute to DirigoChoice.

State law says that savings stemming from efforts to control health-care costs - which Iuppa pegged at $43.7 million on Oct. 29 - are supposed to go into DirigoChoice. The directors of the state agency that oversees DirigoChoice decided on Nov. 22 to collect the full amount through assessments that will begin in January.

"We think the methodology is absolutely flawed," said Katherine Pelletreau of the Maine Association of Health Plans, which sued in Cumberland County Superior Court on Monday. "These are savings on paper" or savings that would have occurred without Baldacci's efforts, she said.

Pelletreau's association represents Aetna Inc., Anthem Blue Cross and Blue Shield, CIGNA HealthCare of Maine Inc. and Harvard Pilgrim Health Care. Anthem Blue Cross and Blue Shield is the private carrier for DirigoChoice.

"We contend that some of these initiatives have nothing to do with Dirigo Health," the umbrella reform plan that includes the DirigoChoice insurance program, said Kristine Ossenfort of the Maine State Chamber of Commerce, which sued on Monday in Kennebec County Superior Court.

"It's really a matter of what should be treated as savings that stem from Dirigo Health," Ossenfort said, because those are the only savings that can be used to help pay for DirigoChoice. She said the chamber believes that number is $2.7 million, not $43.7 million.

The third lawsuit, filed in Kennebec County Superior Court by trusts controlled by bankers and car dealers, raises similar issues and makes procedural arguments against the payment order.

Supporters of DirigoChoice said they were disappointed by the lawsuits.

The calculation of how much Dirigo Health has cut health-care costs was done "under a microscope" in three stages that culminated in Iuppa's ruling, so the $43.7 million figure is reliable, said Joseph Ditre of Consumers for Affordable Health Care.

"The real losers in this whole thing are those uninsured and underinsured Mainers" who rely on DirigoChoice, Ditre said.

Riley, the governor's top health-care adviser, declined comment on the specific allegations in the lawsuits, but said she believes Iuppa's ruling will stand up in court.

Monday's legal maneuvering was only the latest sign that Dirigo Health remains a controversial program whose fate is far from clear.

The Legislature is poised to consider bills in 2006 that would rework the program, which is emerging as an early focal point of next year's gubernatorial campaign.

Baldacci, a Democrat who is seeking re-election next year, sees Dirigo Health and DirigoChoice as highlights of his first term as governor.

But Republicans have their doubts. Recently, for example, GOP candidate Peter Mills, a state senator from Cornville, described DirigoChoice as a risky experiment that has failed.

Staff Writer Paul Carrier can be contacted at 622-7511 or at: pcarrier@pressherald.com

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