Nevada loses round in Blue Cross case

Monday, Oct. 4, 1999 | 10:15 a.m.

CARSON CITY -- Nevada has lost the first round in its battle to get $21 million in the case involving Blue Cross and Blue Shield of Colorado, but the fight isn't over.

Thomas Patton, first assistant attorney general, said the stage is now set for the state to sue to get the money it says it is due.

On Friday the Colorado insurance commissioner denied Nevada's petition to intervene in the Blue Cross Blue Shield's application to change from a nonprofit business to a for-profit company. It is part of a plan for the company to be purchased by Anthem Insurance Cos., a mutual insurance business based in Indiana.

Under the sales agreement, Anthem would pay $140 million to a nonprofit foundation in Colorado in return for the right to switch. Nevada is trying to get a chunk of that money because Blue Cross Blue Shield of Nevada merged with the Colorado company two years ago.

Under the Colorado law a nonprofit company that converts to a for-profit business must pay a fee based on the value of its assets to compensate for benefits it gained while it was nonprofit.

Attorney General Frankie Sue Del Papa said fairness and the law dictate a portion of the corporation's value that is attributable to Nevada subscribers be committed to benefit Nevada citizens.

Since the merger of the Nevada and Colorado insurers in 1997, Blue Cross Blue Shield of Nevada's business has approximately doubled, and it now insures more than 90,000 subscribers in this state.

After the merger Blue Cross Blue Shield of Colorado sought to become a private for-profit company but changed its mind and agreed to be sold to Anthem, which operates six Blue Cross businesses in the Midwest.