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Ventura County Star

Health department will hold hearing

by Deborah Crowe
Jun 24, 2004

The California Department of Managed Health Care said Wednesday it will hold a hearing next month on Anthem Inc.'s increasingly controversial acquisition of WellPoint Health Networks Inc., the parent of Blue Cross of California.

The July 9 public hearing in Sacramento will come exactly one month after a joint Assembly and Senate hearing on the estimated $16.4 billion deal, and two weeks after a Department of Insurance hearing scheduled for Friday in Los Angeles.

The merged companies would be known as WellPoint Inc, but the Thousand Oaks-based WellPoint's corporate headquarters and leadership would shift to Indianapolis, where Anthem is based.

DMHC, which regulates HMO and PPO health plans, has until now maintained that its staff's review was sufficient and that the department was not required to hold hearings.

"It took several months of shame being heaped on the department to get them to do what they should have done months ago," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights, a Santa Monica group that has been among the most vocal critics of regulators' handling of the review.

Officials at the managed care department did not return calls Wednesday.

In advance of his department's Friday hearing, Insurance Commissioner John Garamendi posted on his department's Web site Wednesday the latest draft of Anthem's proposals to alleviate his concerns about how the merger might hurt California residents.

The undertakings, if accepted, would be legally binding restrictions on what Anthem could do with Blue Cross programs and assets post-merger. Anthem has made similar proposals to DMHC.

Garamendi, who regulates traditional indemnity health plans, has the power to block Anthem's acquisition of Blue Cross Life & Health Insurance Co., which handles about 10 percent of Blue Cross' business in the state.

California is the last of 10 states to sign off on the deal. Anthem and WellPoint shareholders are scheduled to vote on the merger Monday.
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Contact the author at: dcrowe@VenturaCountyStar.com