Title: In re VT Health Service Corp

State: vermont

Issuer: Vermont Supreme Court

Document:

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 88-040


In re Vermont Health Service                 Supreme Court
Corporation d/b/a/ Blue Cross
& Blue Shield of Vermont                     On Appeal From
Medicomp Rate Increase Application           Banking & Insurance

                                             April Term, 1989


Gretchen Babcock, Commissioner

James M. Vitt of Paterson & Walke, P.C., Montpelier, for plaintiff-
  appellant

Jeffrey L. Amestoy, Attorney General, William E. Griffin, Chief Assistant
  Attorney General, and Elizabeth R. Costle, General Counsel, Department
  of Banking and Insurance, Montpelier, for defendant-appellee


PRESENT:  Allen, C.J., Peck, Gibson, Dooley and Morse, JJ.


     ALLEN, C.J.   The Vermont Health Service Corporation (VHSC), doing
business as Blue Cross and Blue Shield of Vermont, appeals from three
supplemental orders of the Commissioner of Banking and Insurance issued in
conjunction with her decision on VHSC's request for permission to increase
rates.  We affirm.
     On May 28, 1987, VHSC filed a request for permission to increase its
rates for Medicomp hospital and medical benefits coverage as required by 8
V.S.A. {{ 4513(b) and 4584(a).  On November 19, 1987, the commissioner
issued a decision and five supplemental orders as authorized by 8 V.S.A. {
4513(c). (FN1)
     Before this Court is VHSC's appeal of three of those supplemental
orders, requiring VHSC to conduct a study of administrative expense
reduction and to report to the commissioner, to obtain the commissioner's
prior approval for capital expenditures in excess of $250,000, and to
properly credit subscribers for investment income in future rate filings.
                                    I.
     VHSC first argues that all three supplemental orders violated 3 V.S.A.
{ 809 (FN2) because it did not receive adequate notice or opportunity to prepare
and respond to the subject matter of any of these orders, which it describes
as "hidden issues."  The proceeding before the commissioner was a "contested
case" within the meaning of the Administrative Procedure Act, and required
notice consistent with { 809.  That provision is coterminous with the
minimum standards of due process necessary for a fair proceeding.  See In re
Hot Spot, Inc., 149 Vt. 538, 540-41,