HJNO Jan/Feb 2024

HEALTHCARE JOURNAL OF NEW ORLEANS I  JAN / FEB 2024 11 the process of how the BCBSLA Board of Directors voted to set this plan in motion. It has recently been uncovered, by one of the experts hired by the Louisiana Department of Insurance, that the board’s directors had an economic incentive to approve the plan. If approved, each board member, who was not placed on the newly created indepen- dent foundation, would receive a stipend, or payment, of “no less than” $105,000 per year for ten years to serve on an Elevance “advisory board.”No real duties of advisory board members were uncovered as part of the new role, and each would be paid “not less than $1,050,000, over a ten-year period,” if the deal goes through. If we keep the current BCBSLA system, the membership and policyholders can con- tinue to enjoy exemplary health insurance while being totally in charge of the delivery of this insurance. BCBSLA can continue to run the company to ensure just enough is charged to continue financially, and provid- ers are fairly compensated. Understand- able, since these providers are their neigh- bors and community stalwarts. Or, BCBSLA members can allow the board to sell their company to Elevance, which will run the company for its own purposes. Interest- ingly, when BCBSLAand Elevance were list- ing the benefits of this demutualization and sale, they did not list decreased premiums, more competitive rates, or better payments to healthcare providers. In short, there are no benefits to the membership. In fact, no Henry W. Kinney is the founding partner of Kinney & Ellinghausen. His practice consists of a wide variety of litigation and transactional matters, including historic preservation litigation, zoning/land use, successions and estate planning, public bidding, and general commercial litigation. He has served as general counsel for the Audubon Commission since 1976 and as special counsel for the Board of Commissioners for the Port of New Orleans and the Housing Authority of New Orleans. Currently, Kinney also acts as special counsel to the State of Louisiana, Division of Administration. Prior to entering private practice, he was an assistant city attorney for the city of New Orleans. Kinney has extensive trial and appellate experience in all of Louisiana’s courts, including the Louisiana Supreme Court and the United States Court of Appeals for the Fifth Circuit. He has also handled matters in the Supreme Court of the United States. Kinney received both a bachelor’s degree in political science and a law degree from Tulane University, in 1969 and 1973 respectively. member of policyholder is even promised continued health insurance after the expira- tion of their one-year policy period. The Money Flows to the Handpicked Foundation Board In this proposed convoluted financial transaction, Elevance is buying BCBSLA’s membership assets for $2.5 billion dollars, but they will not be paying the member- owners of the company. Instead, they will pay these billions to an entity that the BCS- BSLAboard has directed it to pay, TheAccel- erate Initiative of Louisiana, Inc. This is a Delaware 501(c)(4) entity that has a board of directors made up of four current BCB- SLA directors. This Foundation has noth- ing to do with the current BCBSLAmember owners. In fact, there is not a single word in the charter of the new entity that mentions BCBSLAor its former members. Its job is to do “good” for the people of Louisiana, not the members or policyholders. The board of BCBSLA will also “give” to the founda- tion an additional $900 million dollars, resulting in the foundation walking with $3.4 billion dollars, not having contrib- uted anything for this money. However, the membership, the owners, will be paid $337 million dollars for their assets. According to BCBSLA and Elevance, with the current proposal, BCBSLAmembers should get 9% of the sales price and the foundation 91%. One of the foundation’s board members, Tim Barfield, said it will be one of the top ten largest foundations in the United States. At the Louisiana Joint Insurance Commit- tee on August 16, 2023, he mentioned that fact when discussing how his “stipend”will be decided. He wants to be paid in a similar manner to the directors of the other large Foundations in the U.S. Status of Process This plan was originally submitted to the Louisiana Department of Insurance in January of 2023. It was twice scheduled for hearing in the summer/early fall last year but was derailed by determined opposition and by the objection of then attorney gen- eral of Louisiana and now the Governor Jeff Landry. Substantial questions were raised by the attorney general, and by the United States Department of Justice, concerning the potential anti-competitive effects of this takeover by Elevance. These issues are still unresolved. Additionally, a class action lawsuit has been filed to stop the Delaware- based foundation from collaborating in the scheme to terminate BCBSLA and to take money that they have no right to collect. This suit will probably be determined prior to a resubmittal of a similar plan of demu- tualization to the Louisiana Department of Insurance that BCBSLA said is still under consideration. Nothing good here for mem- bers, policyholders, or the citizens of Loui- siana. n