Pennsylvania approves Highmark's acquisition of BCNEPA

Pennsylvania's Acting Insurance Commissioner Teresa D. Miller recently approved the acquisition of Blue Cross of Northeastern Pennsylvania (BCNEPA) by Highmark, listing key findings in her approval order and stipulating requirements for Highmark.

The commissioner’s findings include a statement that the proposal does not violate state insurance law; establishment of a four-year advisory board to make recommendations on the BCNEPA service area; assigning certain obligations to the group’s charitable foundation; and forming a public charity branch distinct from that foundation.

Additionally, major findings clarify Highmark’s commitment to maintaining BCNEPA employment and establishes provisions for gradual branding transition vis-à-vis trade name changes.

The approval also mandates conditions for Highmark to submit its annual reports and continued adherence to pre-existing insurance department orders, as well as recognizing the department’s authority in any matters of conflict.

Citing its reasons for pursuing a merger, BCNEPA had previously pointed out declining group membership, lower profit margins as a consequence of the Affordable Care Act and costs associated with provider consolidations.

BCNEPA currently has approximately 540,000 subscribers. The merged plan will operate as Highmark Blue Cross Blue Shield in the 13 counties in northeast and north central Pennsylvania, continuing to serve the Medicaid population through the Gateway Health Plan; HMO/PPO plans Security Blue and Freedom Blue; and children, via the Children’s Health Insurance Program.