Court sets deadline for Dirigo cost savings

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AUGUSTA (AP) – A judge Friday gave directors of the Dirigo Health Agency less than a month to determine the latest health care cost savings arising from the operation of its state-run insurance program.

The agency had missed its statutory deadline of April 1 and asked its board to reschedule a March 27 public hearing until sometime after Aug. 1.

Kennebec County Superior Court Justice Donald Marden balked at the delay and set May 12 as the new deadline for a determination.

Marden’s order was the latest development in an ongoing legal battle over a challenge to the state insurance superintendent’s finding last fall that Dirigo initiatives produced savings of nearly $44 million in its first year.

That decision is under appeal by the Maine Association of Health Plans and two other business organizations. The ruling Friday came on a procedural question and did not address the underlying dispute over the savings offset payment that health insurers must make each year to help fund Dirigo.

The purported savings loom large because they serve as the basis of the offset payment.

In his ruling, Marden said the inability to meet the statutory deadline for determining cost savings used to calculate next year’s payment adversely affects those who brought the lawsuit and their policyholders or members.

A spokesman for the Governor’s Office of Health Policy and Finance said much of the required cost data is unavailable and cannot be obtained until this summer.

“One of the big issues is that hospitals file cost reports at different times of the year,” Adam Thompson said. He said making an incomplete determination “does not make a lot of sense.”

He said the Dirigo board was reviewing Marden’s ruling and considering whether to appeal.

Katherine Pelletreau, executive director of the Maine Association of Health Plans, said the law was clear and the ruling came as no surprise.

“Having the hearing sooner rather than later is a good development,” she said. “We need that information in order to build our rates and to meet notification requirements for our customers.”

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