Opinion ID: 1966598
Heading Depth: 1
Heading Rank: 7

Heading: Plan 65 Medigap Indemnity Program

Text: Fourth, the trial justice found that the State wrongfully penalized Blue Cross because the company is subject to state regulation of its Plan 65 Medigap indemnity program (Plan 65). Blue Cross is a nonprofit hospital and medical service corporation organized under Rhode Island law and subject to its regulation. United is a licensed HMO and health care insurer and is not subject to the same regulation by the Rhode Island Department of Business Regulation. The trial justice was disturbed in particular that the State had considered finding Blue Cross's bid nonresponsive, particularly after overlooking several deficiencies in United's bid. The State's choice to penalize Blue Cross for its inability to guarantee a quote for its Plan 65, although within its discretion, is troubling, especially given its decision to overlook United's failure to provide fully-insured Medicare HMO rates under similar circumstances. Once again, however, we are reminded that the State's award is given a statutory presumption of correctness, and the issue before us is restricted to determining whether this conduct rises to the level of palpable abuse of discretion. H.V. Collins Co., 696 A.2d at 302. The State has two responsibilities to consider during the procurement process. First, it must conduct the proceedings in good faith in a fair and open manner. Section 37-2-2. Second, it must attempt to get the best deal that it can for the taxpayers. See H.V. Collins Co., 696 A.2d at 303. It follows that the State should be permitted to consider whether it might save money by going with a company not classified as a hospital services organization and subject to DBR regulation. We pause momentarily to note the bad blood that has infected the relationship between the State and Blue Cross over the past year or so. When asked at oral arguments what impact this had on the State's decision to penalize Blue Cross, the State's counsel wisely declined to speculate whether it had any effect at all. Based on the fact that the State is not accused of acting in bad faith, it is not our place on appeal to question the State's motive in penalizing Blue Cross for its adherence to a State regulation. Therefore, we determine that the State's decision to award fewer points to the insurer that probably will charge more for Plan 65 did not rise to the level of palpable abuse of discretion and that the trial justice erred in ruling to the contrary.