AG files appeal over health insurance commissioner’s BCBSRI rate increase

PROVIDENCE – An ongoing disagreement between the Rhode Island attorney general and the state’s health insurance commissioner regarding a recently approved 10.4 percent rate increase for Blue Cross Blue Shield of Rhode Island has landed in Superior Court.
Attorney General Peter F. Kilmartin on Friday filed an administrative appeal in R.I. Superior Court asking it to stop the Office of the Health Insurance Commissioner approval of any rates for the Blue Cross direct pay line of business, which is for those who pay their own coverage, without the help of employers, except those insured on the state’s health care exchange who may qualify for Medicaid subsidies.
Kilmartin alleges Commissioner Dr. Kathleen C. Hittner’s decision to approve increased rates was flawed and that she acted “unlawfully, arbitrarily and committed errors of law.”
“As statutory representative of consumers, it is my responsibility and priority to protect the rights of Rhode Island ratepayers,” Kilmartin said in a prepared statement. “Having exhausted all administrative remedies in attempting to resolve this matter at the agency level, our office has filed this appeal. The state laws guiding OHIC’s decision making requirements are clear, and we do not believe they were followed in this case.”
Hittner says she respects Kilmartin’s right to appeal, but stands by her decision to approve the increased rates, saying she has a responsibility to insurers’ solvency as she does to consumer protection.
“I thought I was protecting the consumer to make sure the rates next year don’t go up too much,” Hittner told Providence Business News.
Friday’s appeal is the culmination of a month-long spat between offices. Hittner, on Aug. 3, approved a 10.4 percent increase to Blue Cross direct pay plans, reduced from an original request of 18 percent, which was immediately rebuked by Kilmartin. The attorney general said at the time that Hittner’s decision didn’t provide “any reasoning or support for her findings of fact, making it impossible for anyone to understand her rationale.” Subsequently, he filed a motion for consideration with Hittner’s office, asking she take another look at her decision.
Hittner, after taking Kilmartin’s motion into consideration, came to the same decision and on Friday announced an amended order and decision she made on Aug. 19.
“I am committed to Rhode Island’s clear and transparent rate review process, and I took the attorney general’s motion to reconsider very seriously,” Hittner said in a statement. “After a second review of the facts, I stand by my initial decision and approved a rate increase for BCBSRI.”
Hittner says the main drivers behind the increased rates stem from the phase-out of the temporary federal reinsurance program, which was previously funded through the Affordable Care Act. The decision in question would allow Blue Cross to apply $4.7 million in unanticipated 2014 reinsurance payments and $577,730 in federal subsides toward its reserves, according to her office.
“In the event of unanticipated increases in medical claims, inadequate reserves can lead to the inability of the insurance carrier to pay for its members’ medical expenses, which leaves patients and providers exposed to financial losses. The unanticipated proceeds presented an opportunity to reasonably increase Blue Cross’ long-term financial strength,” according to Hittner’s office.
Still unsatisfied with Hittner’s rationale, Kilmartin filed Friday’s appeal asking the court to “reverse and vacate the decision and the amended decision of the commissioner.” The attorney general is also asking the court to make Hittner approve the recommendations of its hearing officer, Providence lawyer Raymond Marcaccio, who suggested OHIC should allow Blue Cross to retain the unanticipated funds, but use leftover ACA money as a dollar-for-dollar adjustment to its 2016 direct pay rates.
The attorney general also alleges Hittner, during the process, engaged in closed-door communications with one of the parties involved without the knowledge of others, which she rebukes.
“I followed the rules to the letter of the law,” she said.
There is no mention of the closed-door communication in the appeal.

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