Nevada AG intervenes in Blue Cross case

Thursday, Sept. 16, 1999 | 10:59 a.m.

CARSON CITY -- Attorney General Frankie Sue Del Papa on Wednesday set in motion an effort to gain up to $21 million for Nevada in an insurance transaction in Colorado.

She said her office will file a petition Friday with the Colorado insurance commissioner to intervene in the application of Blue Cross Blue Shield of Colorado, a nonprofit business, to convert to a for-profit company and then be purchased by Anthem Insurance Companies, a mutual insurance business.

Under the plan, Anthem would pay $140 million to a nonprofit foundation in Colorado. And Del Papa feels that part of that money is due Nevada because many of the policy holders of the Colorado Blue Cross Blue Shield are in Nevada.

Del Papa said fairness and the law dictate that the portion of the business' value that is attributable to Nevada subscribers be committed to Nevada citizens.

Under Colorado law, a nonprofit company that converts to a for-profit business must pay a fee to cover some of the value of the assets and for other things gained while it was a nonprofit corporation.

Jon Sasser, statewide advocacy coordinator for Nevada Legal Services, led an effort in the 1999 Legislature to change Nevada law to make it similar to Colorado's so this state could be in line for a share of the money.

The effort of Sasser and other social groups was unsuccessful in the Legislature. He said Wednesday he is "very pleased" with Del Papa's action.

Sasser estimates Nevada could get a maximum of $21 million if the attorney general is successful. The Colorado portion of Blue Cross is losing policy holders while the Nevada side is thriving, he said.

The Blue Cross Blue Shield operations of Nevada and Colorado merged in 1997 with the Colorado company as the surviving nonprofit. Sasser said Blue Cross then sought to become a private for-profit company but changed its mind and agreed to be sold to Anthem, which operates Blue Cross businesses in Midwest states.