Blue Cross and Blue Shield of Ohio prepared last week for a second court battle to defend its national Blues license against termination.
But a federal ruling Oct. 11 diminished the likelihood that the Ohio Blues will be able to tra nsfer its license to Columbia/HCA Healthcare Corp., the giant for-profit hospital chain.
U.S. District Judge Lesley Brooks Wells in Cleveland refused to grant a temporary restraining order that would void an automatic termination of the Ohio Blues' license.
The termination went into effect Sept. 9, but the national Blue Cross and Blue Shield Association has not officially disconnected the Cleveland plan.
Wells ruled that the Ohio Blues was unlikely to defeat the automatic termination in a trial. Its license agreements provide for automatic termination 60 days after the filing of a complaint seeking appointment of a trustee, providing the complaint has not been dismissed. Ohio State Attorney General Betty Montgomery filed such litigation in June.
The Ohio Blues declined to comment on the impact of the ruling, but spokesman Dave Buckel said of the license issue: "We will win this in court."
The stakes are high. Colu mbia has agreed to pay $299.5 million to buy most of the Ohio Blues' assets, but that price plunges by $50 million without a license to use the Blues name and service marks.
Columbia has commented little on the license issue and lef t the legal moves to the Ohio Blues, which is bound by its agreement with Columbia to fight to retain its Blues license.
In fact, the Ohio Blues filed a lawsuit in June to fight the association's vote to terminate its license if it proceeded to sell assets to Columbia. The Ohio Blues contends the vote helps competitor Anthem Blue Cross and Blue Shield, based in Indianapolis, which also operates in Ohio.
Wells was scheduled to hear arguments in that case late last week.
Meanwhile, a coalition of consumer, health, religious and labor groups in northern Ohio kicked off a petition drive calling on Gov. George Voinovich and state Director of Insurance Harold T. Duryea to reject the transaction and make public key documents relating to the deal.