A group of Blue Cross and Blue Shield of Ohio policyholders has asked a court to block the proposed sale of the insurer until an independent counsel can examine the fairness of the transaction.
The motion, filed last week in Cuyahoga County (Ohio) Common Pleas Court, came a day after some consumer groups said Blues policyholders and the public ought to have more say in the insurer's proposed sale to Columbia/HCA Healthcare Corp.
Columbia, based in Nashville, Tenn., is the nation's largest for-profit hospital chain. The Blues deal would be its first major move into the business of managing healthcare and processing insurance claims.
At a meeting of insurance regulators last week, Families USA/Boston, Consumers Union and the Center for Insurance Research circulated a statement saying the proposed $299.5 million sale of the not-for-profit Ohio Blues to Columbia should be considered a conversion to a stock-owned company.
That would mean Blues policyholders and perhaps the public should receive financial consideration, the groups said.
"In the proposed transaction, neither the public nor policyholders will receive any portion of the assets to which they are entitled," the statement said.
The Blues, Ohio's largest health insurer, has said its deal is not a conversion to stock because the original company will still exist, although as a shell. The insurer said the proposed deal protects policyholders' rights.
Blues spokesman Dave Buckel said the insurer is confident policyholders will approve the deal.
The motion, filed by the policyholders in Cuyahoga County Common Pleas Court, asked the court for three orders:
A determination that the sale is a conversion from a mutual company owned by Blues policyholders to a for-profit enterprise.
A requirement that a special board of independent trustees be hired to analyze the fairness of the deal for policyholders.
A ban on the Blues' solicitation of proxies from policyholders until the special board and the Ohio Department of Insurance have completed their reviews.
Blues spokesman Bill Silverman said the motion filed is a meritless political maneuver.
"We intend to shortly ask the court to dismiss the entire lawsuit," he said.
The policyholders' motion comes after a class-action lawsuit filed in April alleging that Columbia will acquire the Blues "for a mere fraction of its true value under terms that will line the pockets of Blue Cross executives and affiliates while depriving ordinary individuals who purchased medical insurance from Blue Cross of assets that they rightfully own."
The plaintiffs have asked that a hearing on the latest motion be scheduled for the end of June or beginning of July.