Aetna Inc. wants a federal judge in Detroit to compel Blue Cross Blue Shield of Michigan to disclose the way it sets compensation for CEO Dan Loepp and more than a dozen other top executives, in a civil lawsuit over favorable charging agreements between the state’s largest insurer and various hospitals.
Aetna, which in mid-June defeated the Blues motion to dismiss its lawsuit alleging anticompetitive conduct, now wants Judge Denise Page Hood at U.S. District Court in Detroit to compel Blue Cross to disclose documents that show “targets goals or formulas” to compensate Loepp and other top executives between 2005 and 2011.
Aetna, which filed suit against the Blues in December 2011, also wants details on nonqualified defined benefit pension plans that the Blues maintain for top-compensated executives.
The Blues responded late Friday with a brief opposing Aetna’s request. Hood is expected to decide the issue without arguments sometime after July 20, when each company is supposed to update the court on various legal issues.
“Because Blue Cross has made clear that it will defend this (lawsuit) based on its purported motivation to advance the public good, Aetna is entitled to take discovery to test Blue Cross’s arguments,” Aetna states in its motion.
“These requests (on compensation and benefits) are designed to assess whether Blue Cross’s executives are given incentives to carry out a ‘social mission’ to ‘benefit the people of Michigan’ or, rather, whether Blue Cross’s executives are given incentives to maximize Blue Cross’s operating profits and retained capital, market share, and competitive positioning.”
via Aetna wants Blues to tell how it sets pay for Dan Loepp, other execs | Crain’s Detroit Business.