The Chicago-based health insurer that hopes to buy Blue Cross and Blue Shield of Montana said Monday it has scrapped plans to build a 100-employee call center in Great Falls.
To go ahead with the call center, Health Care Service Corp. said it needed a “reasonable assurance” from state regulators by last week that its merger with Blue Cross Montana would be approved, but that assurance didn’t occur.
However, HCSC and Blue Cross said in a statement they remain committed to completing the merger, which is under review by the state attorney general and state auditor.
“Unfortunately, the timing of the regulatory process and the opportunity to receive reasonable assurance of the alliance being approved did not align with when HCSC needed to begin moving forward” on building the call center, the statement said.
State Auditor Monica Lindeen is disappointed with HCSC’s decision to pull the plug on the call center, her spokeswoman, Jennifer McKee, said late Monday.
McKee pointed out that a hearing on the proposed merger had been scheduled Feb. 12 in Helena, but was delayed a month at HCSC’s request, pushing the deadline for submitting final arguments to April 19. At that time, HCSC said the change in the hearing schedule wouldn’t affect its plans to build the Great Falls call center, McKee said.
It wasn’t until just before the March 12 hearing that HCSC apparently changed its mind and said it needed an assurance by March 30 that the merger would be approved, McKee said. Lindeen’s office said it was sticking to the agreed-upon schedule.
The call center is needed to meet expected demands this fall, related to the launching of Internet insurance marketplaces and other items related to the U.S. Affordable Care Act, the company said.
HCSC also said Montana is an “attractive state” for doing business, and that if the merger is approved, it will consider “future opportunities.”
Blue Cross Montana announced last year that it planned to merge with HCSC, a coalition of Blue Cross plans in Illinois, Texas, Oklahoma and New Mexico that has 13 million customers.
Blue Cross Montana has 270,000 customers, and said merging with HCSC would give it an economy of scale and other resources it needs to deal with multiple changes in the health-insurance marketplace brought on by federal health-care reforms.
Three weeks ago, Attorney General Tim Fox signed an agreement with HCSC and Blue Cross that the purchase price would be $40 million and that HCSC would build the call center in Great Falls.
The original proposed purchase price had been $17.6 million.
However, both parts of the agreement were premised on state insurance regulators agreeing by March 30 that they likely would approve the merger.
Lindeen and the companies are scheduled to submit their proposed findings April 19 to hearings officer William Leaphart, a former state Supreme Court justice. Leaphart will make a recommendation on whether the merger should be approved.
Under state law, Fox must review whether Blue Cross assets are properly valued in any sale. Lindeen must review whether the merger is in the best interests of consumers and health-insurance markets in the state.