Colorado rejects Nevada’s Blue Cross bid

Tuesday, April 7, 1998 | 12:54 p.m.

Jon Sasser, an attorney with Washoe Legal Services, said efforts by Nevada interests to intervene in the regulatory hearings involving Blue Cross/Blue Shield of Colorado were rejected by Colorado state officials.

The next step would be a lawsuit, he said, adding, "We're considering our options."

Blue Cross/Blue Shield of Nevada merged with its much bigger Colorado counterpart in January 1996. The state of Nevada received $1.5 million as part of the deal.

But the company then petitioned Colorado officials to allow it to turn into a for-profit company.

In order to become a for-profit, the insurance company must transfer the value of its assets while a nonprofit to the state of Colorado for its use for health care programs.

The transfer of assets is required by most states when nonprofit health foundations convert to for-profit status to reimburse taxpayers for the decades that they received tax-exempt nonprofit status.

Nevada - if it had the chance to show that about 10 percent of the value of the new company came from this state - could have received much more than the $1.5 million paid out as a result of the 1996 merger, Sasser said.

If the company's total assets are eventually valued at $300 million, then Nevada could have been entitled to 10 percent, or $30 million, he said.

But Colorado officials said the issue of Nevada's share of the assets of Nevada Blue Cross/Blue Shield should have been addressed when the merger was approved by Nevada.