Oregon’s Insurance Commissioner Speaks Out About Regence BlueCross BlueShield

The decision by Providence to sever its contract with HealthNet could also pique his attention if HealthNet loses a significant number of members to its competitor

October 3, 2012 -- Regence BlueCross BlueShield could find itself on the hot seat again. This time actuaries from inside the Oregon Insurance Division are in the midst of conducting an in-depth financial review at Regence’s headquarters in downtown Portland -– looking for any irregularities and whether the insurer has the financial stability to meet the needs of its policyholders.

Oregon’s insurance commissioner, Lou Savage, made it quite clear that Regence isn’t being targeted because of any issues that have arisen in the past several months. “This is part of our regular cycle,” he said.

That review is expected to be completed by the end of October, and is looking at Regence’s finances from January 2009 through December 2011. The Insurance Division conducts such reviews every five years.

Nevertheless, Savage understands the frustration many people have about Regence, given its recent decision to eliminate its lowest cost individual policy, slash benefits and reduce payments to psychologists, chiropractors and other health professionals -- while, at the same time, increase premiums for individual policyholders and small businesses.

Last year Regence also transferred $56 million to its holding company based in Seattle, known as Cambia Health Solutions from its investment portfolio, while investing those funds in start-up ventures and for-profit companies. A similar transaction occurred in 2010.

“Some people think we should be looking at these out-of-state issues but our authority is very limited and deals with activities in Oregon,” Savage told The Lund Report. “If Regence does something that we have authority over, we’ll pursue it. If not, our hands are tied. We’re held to a very strict standard.”

Once the Affordable Care Act turns into a reality, it’s a “legitimate policy discussion” to look at these for-profit investments,” Savage said. “But since there are a lot of moving parts it might be better to wait until after the implementation of the ACA.”

Also, under Savage’s watch, Insurance Division officials decided to look over the contracts by Regence and its network providers – physicians and hospitals in the Portland metropolitan area – before approving its rate increase for individual policyholders. Those documents were not made public much to the ire of the OSPIRG Foundation, a consumer advocacy group.

“The information we sought from Regence was not part of its initial filing,” said Savage. “And, I believe it’s a different standard. The question of whether this information should be confidential in the future is a policy question, and I think the legislature will look at this issue next session since we now have two years under our belt doing rate reviews.”

The legislature could decide to implement a public utility model, he said, where an intervener has authority over such confidential information or decide to modify the current rate review system.

“But, it’s likely that providers would object as much as insurers about releasing contractual information,” he added.

Savage is also paying attention to the market conduct examination of Regence BlueShield of Washington under way by its insurance commissioner, Mike Kreidler that should be completed next March. “It’s their exam, and I don’t want to get in the middle of that,” he said.

In an attempt to learn more about Regence’s activities, The Lund Report is interested in doing further research and looking for monthly and quarterly reports that show adjudication rates and membership statistics for all BlueCross BlueShield licensees. Anyone who would like to share confidential information about Regence should contact Diane Lund-Muzikant at [email protected]

Providence’s Decision on HealthNet

On the decision by Providence to sever its relationship with HealthNet next year, whereby its members can no longer see Providence physicians or hospitals – with the exception of southern Oregon – Savage acknowledged that his division doesn’t have authority over the cancellation of provider contracts.

But, he said, if HealthNet loses a significant number of members because of this decision, “we’ll take a hard look at that and look at the status and the process.”


Review the most recent financial exam conducted by the Oregon Insurance Division of Regence BlueCross BlueShield by clicking here.

Learn more about Regence’s decision to invest in for-profit ventures by clicking here.

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