Minnesota Attorney General Mike Hatch's effort to oust six members of Medica's 14-member board of directors ended late last week. A judge concluded Hatch wrongly accused the directors of deception, self-dealing and engineering a "sham election" to keep control of the Minnesota insurer.
Hatch, widely known for lengthy public inquiries into Minnesota's not-for-profit health plans, said in a prepared statement that he was disappointed, but would accept Minnesota District Court Judge Lloyd Zimmerman's ruling.
The judge rejected Hatch's allegations that six Medica directors appointed by the attorney general in 2001 "hijacked" the not-for-profit health plan for personal gain. "The evidence at trial does not support the state's claims that these individuals ... ensconced themselves in lucrative board positions for personal benefit," Zimmerman's ruling said.
Hatch appointed Medica's board after the 1.3 million-member health plan split from Allina Hospitals & Clinics during a 2001 investigation into allegations of excessive spending on travel, entertainment and executive compensation. He sought to remove six of his prior appointees and asked the court to appoint a special master to oversee the election of new directors, arguing the attorney general still had jurisdiction over the insurer. Zimmerman rejected the argument that Hatch continued to have jurisdiction over Medica.
The judge praised Hatch's earlier efforts to clean up abuse at Allina and its then-subsidiary Medica, but called the attorney general's recent allegations unfortunate.
"This expensive, time-consuming suit against Medica and its board was supported by overheated rhetoric and accusations of self-dealing, deception and hijacking," Zimmerman wrote. "They obscured the fact that the attorney general's intervention in 2001 was government at its best -- protecting the public from corruption, waste and abuse."
Larry Bussey, a Medica spokesman, said the ruling pleased the insurer's officials. "We appreciate the sentiment expressed in the ruling that this puts this battle behind us," he said.