1 1 ROUGH DRAFT TRANSCRIPT 2 3 CASE NAME: LOUISIANA HEALTH SERVICE WITNESS NAME: DR. Steven udvarhelyi 4 DATE OF DEPOSITION: 2/7/24 - - - 5 This is an unedited, unproofread, 6 uncertified transcript for attorneys' information only. This transcript may NOT be cited or quoted in 7 documents or used for examination purposes. 8 This raw transcript may contain the following: 9 1. Conflicts - an apparently wrong word 10 that has the same stenotype stroke as a less-used word. Conflicts are remedied by the reporter in 11 editing. 12 2. Untranslates/Misstrokes - a stenotype stroke appears on the screen as the result of the 13 computer dictionary not having the stroke previously identified or a misstroke or partial translation of 14 the word. 15 3. Reporters' notes - a parenthetical word or phrase from the reporter. Since the reporter 16 must write each word or phrase will not be apparent until some time later. Reporters' notes provide the 17 opportunity to correct such situations. 18 19 20 21 22 23 24 25 2 1 EXAMINATION 2 BY MR. KINNEY: 3 Q. Okay. Doctor, you're the chief executive 4 of, I'm going to call it Blue Cross Blue Shield, 5 which is a Louisiana Health and Indemnity Company; 6 is that correct? 7 A. Of the company's Louisiana Health Service 8 Indemnity Company doing business as Blue Cross Blue 9 Shield of Louisiana. 10 Q. Would you mind speaking up? 11 A. Sure. The name of the company is 12 Louisiana Health Service Indemnity Company doing 13 business as Blue Cross Blue Shield of Louisiana. 14 Q. Do you mind if I just refer to it as Blue 15 Cross of Louisiana? 16 A. That's however you wish. 17 Q. Okay. And you're the chief executive 18 officer, right? 19 A. I am. 20 Q. Would you say you're the most 21 knowledgeable person about the plan of 22 reorganization that has been submitted to the 23 Louisiana Department of Insurance? 24 A. Not necessarily, sir. 25 Q. Okay. Who would you say would be the 3 1 most knowledgeable person? 2 A. It depends on the attributes you're 3 talking about. So the legal attributes, I'm not a 4 legal expert, so I would not know the legal details 5 as well as our lawyers. 6 Q. The basic merits of the plan, would that 7 be you? 8 A. I'm not sure what you mean by basic 9 merits, but I'm familiar with the plan. 10 Q. And did you sign the submittal to the 11 Louisiana Department of Insurance for the plan of 12 reorganization for Blue Cross Blue Shield? 13 A. I can't recall if I -- I sign a lot of 14 documents. I can't specifically recall whether it 15 required signature or not. 16 Q. Okay. Do you understand that the hearing 17 that will be conducted on the 14th or 15th of 18 February will be to consider the plan of 19 reorganization that Blue Cross has submitted to the 20 Louisiana Department of Insurance? 21 A. Yes. 22 Q. So you're familiar with the plan? 23 A. I am familiar with the plan. 24 Q. Okay. And you're familiar with the 25 benefits that are in the plan that are going to be 4 1 for the members? 2 A. I am. 3 Q. Okay. And the benefits are directly for 4 the members? 5 A. The benefits are for the policyholders 6 and the members. 7 Q. What is the difference between a 8 policyholder and a member? 9 A. It depends on the term that you use, 10 member. Again, I know that there are a number of 11 terms that use the word member in the plan of 12 reorganization that have very specific definitions, 13 so I would say we'd have to look at those specific 14 legal definitions on that. But in our normal course 15 of business, we use the term member to mean somebody 16 that has a Blue Cross Blue Shield card on a policy 17 that we write. We also use it to refer to people 18 that are in employer groups that are self-funded. 19 They don't actually have an insurance policy. The 20 insurance risk is taken by the employer. 21 Policyholder is defined in our articles 22 as somebody who purchases an insurance policy with a 23 mutual company. And the articles are very specific 24 that just because you have a card and get coverage, 25 if you're not the purchaser, you're not a 5 1 policyholder. So it very simply says if you're an 2 employer group and the employer purchases the 3 coverage, the employer is the policyholder, the 4 employees and their dependents are not. 5 Q. Would it be accurate to say that all 6 members are policyholders but not all policyholders 7 are members? 8 A. No. 9 Q. It wouldn't? 10 A. So, all policyholders are members, not 11 all members are possible. 12 Q. Would you mark that for me? 13 Who votes in the administration and 14 operation of Blue Cross? Who are the voters? 15 A. I don't believe there are any voters in 16 the day-to-day operations of Blue Cross. 17 Q. Who elects the board? 18 A. Policyholders. 19 Q. Not members? 20 A. Policyholders. 21 Q. Do members have any definition in the 22 Articles of Incorporation? 23 A. I'd have to refer to the line of general 24 I don't have it committed to memory. 25 Q. So how many policyholders are there in 6 1 the state of Louisiana? 2 A. At the current moment, you would have to 3 pick a specific date because policyholders come and 4 go. I believe approximately as of the record date 5 that we set for our special meeting on this matter, 6 which was at the end of last year, there's 7 approximately 95,000. 8 Q. 95,000 policyholders? 9 A. Correct. 10 Q. Okay. So when you say you have 1.9 11 million people that are insured, those are not 12 policyholders, correct? 13 A. Correct. The subset of the 1.9 are 14 policyholders, but many of the 1.9 or not. 15 A. So of the 95,000 policyholders that you 16 just described, how many of those are members? 17 A. So again, I'm going to use the term 18 member not in the context of as it's defined in the 19 plan of reorganization. I said we use it in every 20 day to mean people that we provide services to, 21 either insurance product or administrative services. 22 So an employer group would be the policy holder. 23 There would be a designated person there, but the 24 group itself as a company wouldn't be a member. It 25 would be the employees of that company that are the 7 1 members. If you're an individual, then the policy 2 holder and the member would be the same. When you 3 submitted the plan of reorganization and you 4 provided benefits, it is my understanding you in the 5 plan, you provided benefits to the Commissioner of 6 Insurance and the Department of Insurance that you 7 believed were going to be provided to the members? 8 A. And policyholders. 9 Q. Well, did you say members or did you say 10 policyholders? 11 A. It would be both. 12 Q. You don't recall whether you specified 13 one or the other? 14 A. I think -- I mean, if you'd like to look 15 at specific language, I can give you my opinion on 16 that language. I don't have the entire document 17 committed to memory. 18 Q. You're familiar with the law that 19 requires the plan submitting the statement of 20 reorganization will protect the immediate and 21 long-term interest and serve the best interest of 22 the policyholders. Are you familiar with that? 23 A. I know that -- 24 MR. O'BRIEN: 25 Objection. You're asking him to 8 1 interpret or you're asking him if he's read 2 it? 3 BY MR. KINNEY: 4 Q. Answer the question, would you please? 5 A. Could you repeat the question? 6 Q. Are you familiar with the proposal in the 7 plan of reorganization submitted by Blue Cross? It 8 says the board believes that the proposed 9 reorganization will not in any way adversely affect 10 policy premiums or healthcare benefits to the 11 members. You familiar with that? 12 A. Yes, sir. 13 Q. Okay. And do you believe that to be 14 accurate and true? 15 A. I do. 16 Q. Okay. And what is the length of term 17 that you believe is going to be covered by that 18 statement? Do you think that that's going to be for 19 the intermediate and long-term benefit of the 20 members? How long do you think that statement is 21 going to be good for? 22 MR. O'BRIEN: 23 Objection. Calls for speculation. 24 Please go ahead and answer. 25 THE WITNESS: 9 1 As we stated, we all know that 2 health care costs are going up. They've been 3 going up every year. There's medical 4 inflation and so we believe that health care 5 costs will go up and our premiums are related 6 to health care costs. So as long as health 7 care costs go up, our premiums will go up. 8 We believe that this plan of 9 reorganization will allow them to go up less 10 in the future. I can't give you a specific 11 number, but we believe that it will go up less 12 in the future if we do the plan of 13 reorganization than if we do not. 14 BY MR. KINNEY: 15 Q. Do you think there will be any adverse 16 impact on the policy premiums or health to the 17 members? 18 A. No adverse impact. 19 Q. And what is the basis for your conclusion 20 and statement? 21 A. The basis is I have over 30 years of 22 experience as a physician treating patients. As 23 somebody who's worked in a variety of healthcare 24 settings, I understand healthcare very well. And so 25 I believe that the resources and capabilities that 10 1 we will get through this plan of reorganization 2 will allow us to improve the health of our 3 policyholders and members better. And by virtue of 4 keeping them healthier, it will help keep health 5 care costs down. 6 Q. Could you give me the specifics of maybe 7 three or four areas that you're certain are going to 8 lead to the -- not going to have an adverse impact 9 on the policy premiums of health care of the 10 members. Maybe give me two or three or four, 11 whatever? 12 A. I mean, I don't think that there's any 13 area where there'll be an adverse impact on parents. 14 Q. And is that strictly based on your 15 understanding of the relationship with Elevance? 16 A. It's related to the fact that when we 17 make investments today, we have to basically spread 18 those costs over our current operating base, which 19 is smaller than Elevance is. So the cost, you know, 20 if we're a part of a larger organization, will be 21 less. And they have programs and services that help 22 improve care that we don't have today. 23 Q. You made, you being Blue Cross, made 24 numerous statements in the plan, submitted plan -- 25 proposed plan of reorganization. Are all of those 11 1 benefits 100 percent based on the policyholders and 2 members moving their health insurance to Elevance? 3 MR. O'BRIEN: 4 Objection. Calls for speculation. 5 Go ahead and answer. 6 THE WITNESS: 7 Our plan does not require change to 8 Elevance. The policies that our members and 9 policyholders have today are with Blue Cross, 10 and they will stay with Blue Cross. Those 11 policies will not change. Blue Cross will 12 become -- Louisiana Health Service Indemnity 13 Company will become a subsidiary of Elevance, 14 but Louisiana Health Service Indemnity Company 15 will stay as an entity in Louisiana that still 16 gets oversight from the Louisiana Department 17 of Insurance. 18 So I think as we've said before, the 19 policies remain in effect with, I'll call it 20 LHSIC, that's the parent company, or if the 21 policies with our HMO subsidiary, they all 22 stay in force, they don't change to Elevance. 23 BY MR. KINNEY: 24 Q. The board of the new entity is going to 25 be run by Elevance; is that correct? The board of 12 1 the new Blue Cross, will that be Elevance's board? 2 A. It will be the board of Louisiana Health 3 Service Indemnity Company. 4 Q. Who will elect those board members? 5 A. I'm not sure whether they're elected or 6 whether they'll be actually appointed by LHIC. I 7 don't actually know technically who is -- 8 Q. Who's going to own the new Blue Cross? 9 A. So, if the plan of reorganization and the 10 acquisition go through, then LHSIC will be owned by 11 at least at a parent level by Elevance. I don't 12 know under Elevance technically legally where it 13 will sit. 14 Q. So the new board, the new entity that 15 you're going to call Blue Cross, right? That's 16 going to be 100 percent owned by Elevance. Is that 17 accurate? 18 A. Yes. 19 Q. Okay. And that's the board that you say 20 is going to provide benefits, or the entity that's 21 going to provide benefits to members and 22 policyholders? 23 A. Well, the company will, yes. 24 Q. So essentially, is it accurate to say 25 that everything that you've said in this plan of 13 1 organization is dependent on what Elevance wants to 2 do in the future? 3 A. No. 4 Q. What else would it be dependent on? 5 A. So we have an agreement that outlines the 6 parameters of both the plan and reorg, and so a lot 7 of that has been specified in that plan. 8 Q. And the plan is between who? Somebody 9 besides Elevance and Blue Cross? 10 A. The plans between Blue Cross Blue Shield 11 of Louisiana and Elevance Health, yes. 12 Q. So everything is contained in that plan? 13 A. I mean, not every operating detail, no. 14 Q. So every guarantee or benefit that you've 15 been saying is available from Elevance is contained 16 in the plan of reorganization that you've submitted 17 to the Department of Insurance? 18 MR. O'BRIEN: 19 Objection. Compound. You can go 20 ahead and answer. 21 THE WITNESS: 22 I think what I said to you is the 23 plan of reorganization is what it is. It is 24 not an operating plan for the company. 25 BY MR. KINNEY: 14 1 Q. How long are these benefits guaranteed 2 for? What's the duration of the benefits that 3 you've mentioned in your plan of reorganization? 4 How long are those good for? Five years? Ten 5 years? Two years? 6 MR. O'BRIEN: 7 Objection. Objection compound. Go 8 ahead and answer. 9 THE WITNESS: 10 I think you need to clarify what you 11 think is guaranteed in there. 12 BY MR. KINNEY: 13 Q. Well, let's say if I'm going to have no 14 impact on a policy premium, how long is that 15 statement going to be good for. 16 A. Yes, so what I would say to you is that 17 with or without the plan of reorganization, it 18 would be hard to guarantee what the future is going 19 to look like under any scenario. 20 Q. So, in fact, there is no truth to this 21 statement about policy premiums are not going to 22 adversely be impacted? 23 A. No, I want to be clear. The plan of 24 reorganization we believe -- I believe, will provide 25 benefits to policyholders and have no adverse 15 1 impact on premiums because I believe that with the 2 plan of reorganization we will be able to keep 3 premiums lower than they otherwise would be. They 4 will go up. 5 Q. Everything you just said, is that 6 dependent on Elevance? 7 A. It's dependent on the people running 8 LHSIC in Louisiana. 9 Q. Which is 100 percent owned by Elevance; 10 is that correct? 11 A. If the transaction goes through, it will 12 be owned by Elevance. And our employees will become 13 employees in Elevance and those employees that are 14 working today will work tomorrow and they will 15 continue to do what they do today with greater 16 resources. 17 Q. How long does Blue Cross guarantee its 18 insurance to a policyholder or a member? 19 A. One year. 20 Q. So, is it accurate to say that nobody in 21 this transaction is making any representations to a 22 policyholder or a member that is greater for the 23 policy period between the insurer and the 24 policyholder member? 25 MR. O'BRIEN: 16 1 Objection. You can go ahead and 2 answer. 3 THE WITNESS: 4 I think my answer is all of our 5 policies are issued for one year at a time. 6 BY MR. KINNEY: 7 Q. So, Elevance is not making any proposals 8 or plans or guarantees or anything to anybody that 9 extend past the policy period that a member or 10 policyholder has with Louisiana Blue Cross; is that 11 accurate? 12 A. No, that's not accurate. There are a 13 number of obligations they have in the agreement. 14 For example, the agreement to maintain the 15 employment levels are for two years. That's not 16 related to the -- 17 Q. I'm just talking about members and 18 policyholders and healthcare and premiums. 19 A. Right. So the plan of reorganization 20 does not change any of the enforced policies. They 21 continue as is. All those policies, with or without 22 the plan of reorganization, renew every year. And 23 the premiums change. Premiums will change based on 24 the medical experience of a group. Some groups are 25 community rated. Some groups are experience rated. 17 1 All the normal business process of how we issue 2 policies will continue as is today and the premiums 3 will be based on the cost structure for the block of 4 business that we're looking at just like it is 5 today. 6 Q. But the ultimate control of the premiums 7 will rest with Elevance for the insured under the 8 Blue Cross program today; is that correct? 9 A. The control resides with Blue Cross Blue 10 Shield of Louisiana, LHSIC, which will be a 11 subsidiary of Elevance. 12 Q. Why is it difficult for you to say that 13 Elevance is ultimately in control of whatever 14 happens here with the Blue Cross? Is that -- am I 15 factually putting that in a bad light? Why can't 16 you just say, Elevance is in charge of running Blue 17 Cross of Louisiana? 18 MR. O'BRIEN: 19 Objection. You're badgering the 20 witness. He's allowed to give his answer. 21 You may not like it, but you don't get the 22 badger him. Let's move on. 23 BY MR. KINNEY: 24 Q. Is it difficult -- is there a reason why 25 you can't say Elevance is going to be in charge of 18 1 everything that happens if the plan of 2 reorganization is approved? 3 A. I don't know what you mean by that 4 statement. The way I will answer your question is 5 to say the company will be owned by Elevance many 6 decisions most decisions will be locally made. One 7 of the decisions that gets made locally is 8 underwriting. And underwriting is the process by 9 which premiums are set. That will be done locally 10 in Louisiana based on the experience in Louisiana by 11 people in Louisiana. 12 Q. So, have you made, you, Steve Udvarhelyi, 13 have you made representations about what's going to 14 happen in the future with Blue Cross of Louisiana 15 and its provision of policies to insureds in the 16 future? 17 A. I've made statements that I think that 18 our ability to keep premiums affordable will be 19 better under the plan of reorganization than if we 20 don't do it, which is the direct benefit to our 21 policyholders. I've made that statement. 22 Q. But you've had no guarantees to that or 23 no written contractual obligations that would 24 support that statement, are there? 25 A. We're not guaranteeing, again, we 19 1 guarantee a premium for the year you buy a policy. 2 Q. That's it? 3 A. That's true for every insurance company. 4 Q. So there are no guarantees beyond the 5 policy period? 6 A. Health insurance in this country, the 7 policies are written typically for one year at a 8 time. 9 Q. So can you guarantee -- I'm a 10 policyholder and a member, and I think I renew in 11 December or October, somewhere in there. Can you 12 guarantee me for the next five years I won't lose 13 access to my doctors and hospitals that are 14 currently part of the Blue Cross plan in Louisiana? 15 A. I can't tell you what doctors and 16 hospitals will do. We have doctors and hospitals 17 terminate their contract with this. That is their 18 right to do that. If they want to terminate the 19 contract, they can do that. I can't guarantee that 20 they will stay with us. 21 Q. So you can't tell me I won't lose my 22 access to my doctor or hospital, can you? 23 A. I can't tell you what your doctors and 24 hospitals will do. I can tell you that there's 25 nothing in the transaction that will force them or 20 1 otherwise cause them to leave. 2 Q. Can you tell me will my premiums increase 3 because of this transaction? Can you tell me that 4 that's a correct statement? 5 A. Your premiums will not increase because 6 of this transaction. 7 Q. But my premiums will increase, will not 8 increase only due to the expiration period of my 9 policy; is that accurate? 10 A. Your premiums will increase based on what 11 the underlying trend is in health care costs and 12 whatever type of policy that you get. There will be 13 changes. We go through a process every year with 14 our actuaries to look at the medical cost inflation. 15 We develop rates, we file those rates with the 16 Department of Insurance, for most products, not all. 17 And we give projections for self-funded customers 18 based on that so they can reserve for their 19 self-funded payments. 20 Q. You've made the statements to the 21 question, will my premiums increase because of this 22 transaction? And you've made the statement, no, 23 premiums will not increase because of this 24 transaction. What period of time is that answer 25 supposed to cover? 21 1 A. So, that answer would apply for any 2 period of time after the transaction. The 3 transaction itself will not cause premiums to go up. 4 Increases in health care costs will cause premiums 5 to go up. 6 For example, there is a new drug for 7 sickle cell disease that is likely to be curative. 8 It costs $2.2 million per treatment. When that gets 9 introduced as a new drug, premiums will go up. So 10 there are a lot of medical advances that will cause 11 premiums to go up. 12 When I give a rate increase to a health 13 system, which we do every time we renew those 14 contracts, that rate increase in what I pay them 15 will cause your premiums to go up. 16 Q. So my insurance premiums are going to go 17 up when they expire, and my policy period expires in 18 December of 2024; is that accurate? 19 A. That is accurate. Where there is medical 20 inflation and every year there is an increase in 21 premiums underlying. Now some groups, if they're an 22 experienced rating group, they may not see the same 23 increase as other groups. 24 Q. But you can't, you're not trying to make 25 any guarantees to anybody after the expiration of 22 1 their policy period. Is that accurate? 2 A. What I've said is that we believe that 3 the plan of reorganization will allow us to do a 4 better job of keeping healthcare affordable in the 5 future. 6 Q. Can Elevance shut down writing insurance 7 in Louisiana six months from now if the plan was 8 approved? 9 A. I don't know the answer to that question. 10 Q. Do you think that that's something that 11 would be important to the policyholders that are 12 going to be moving their health insurance to a big 13 company that you're recommending to know whether or 14 not that company can shut down voluntarily, legally, 15 without any restriction? Do you know that or do you 16 not know that? 17 A. I would think that whatever rules apply 18 to that would apply to Blue Cross today. I don't 19 think the transaction changes any company -- 20 whatever a company can do in terms of writing health 21 insurance. We know that in Louisiana, when the 22 individual market came in, that many of the 23 companies that came to Louisiana to write 24 individual insurance left. We did not. So we know 25 that people come in, and I know that there's a 23 1 specific legal requirement related to participation 2 in the federal marketplace and the individual 3 Affordable Care Act policies. I don't know what all 4 the rules are about entering or leaving a market 5 legally, but those rules would apply to all 6 insurers. 7 Q. Can Blue Cross Louisiana shut down? Go 8 out of business? 9 A. Again, I don't know the answer to that 10 question. I don't know the specific legal rules on 11 that, but whatever the rules are, I would believe 12 they would apply to everybody, including Blue Cross. 13 Q. Do you have anything in your contracts or 14 documents or obligations between Blue Cross and 15 Elevance that says they can't get out of Louisiana, 16 leave Louisiana, quit underwriting in Louisiana? 17 A. I'm not aware of any. I don't know if 18 there's anything in there related to that or not. 19 Q. You don't -- okay -- I accept that you 20 don't. 21 So all of your representations about 22 Elevance and your plan of reorganization are 23 dependent on Elevance continuing to write insurance 24 in Louisiana; is that correct? 25 A. There have never been any discussions 24 1 that I have been part of about Elevance leaving 2 Louisiana. In fact, their statements -- 3 Q. That's not my question. 4 A. Okay. 5 Q. Is there anything in the documents that 6 you're familiar with or in your discussions with 7 Elevance where they guarantee not to leave the state 8 of Louisiana and not just shut down writing 9 insurance for some period of time? 10 A. I said before I'm not aware of any 11 provisions like that. 12 Q. So any representations that you make to 13 anybody about Elevance are solely contingent on 14 Elevance's decision whether to continue to write in 15 the state of Louisiana or not; is that accurate? 16 A. Sir, I said before, I don't know the 17 requirements that apply to health insurers in detail 18 in Louisiana about when they can or cannot enter a 19 market. What I do know is that since I've been in 20 Louisiana, other insurance companies have entered 21 and left different markets. So there's obviously a 22 process there and it's not an all or none. Some 23 people have stayed in the group market. Some people 24 have come in and out of the individual market and 25 there are rules. I don't know what those rules are. 25 1 Q. Okay. For the purposes of this question, 2 let's just assume that they could leave at will. Is 3 there anything in any of your documents and 4 agreements with Elevance that say that they will not 5 leave writing and not stop writing insurance in the 6 state of Louisiana? 7 MR. O'BRIEN: 8 Objection. Calls for speculation.. 9 It's a hypothetical. 10 THE WITNESS: 11 I've said again, there have been no 12 discussions. I'm not aware of any provisions 13 and I can't speculate about what they will or 14 will not do in the future. 15 BY MR. KINNEY: 16 Q. I'm asking you, Doctor. Do you know of 17 any agreement between Blue Cross and Elevance that 18 requires them to continue to write insurance in 19 Louisiana for some period of time? 20 MR. O'BRIEN: 21 Objection. Asked an answer. He's 22 not going to answer it again. Move on. 23 BY MR. KINNEY: 24 Q. You've done a lot of due diligence on 25 Blue Cross -- Elevance. 26 1 A. Correct. 2 Q. How many states has Elevance pulled out 3 of writing health insurance? 4 A. They're in the same 14 Blue Cross and 5 Blue Shield states that they've been as long as 6 I've been aware. 7 Q. Has Elevance stopped writing health 8 insurance in any states in the last five years? 9 A. So I know they've lost some Medicaid 10 contracts in some states. Those are bid, as you 11 know, on an ongoing basis and you have to renew the 12 bid with the state. So I know that they've lost 13 some Medicaid contracts. And I think that perhaps 14 some of their Medicare products have changed, but 15 they've not left any of the Blue Cluster Shield 16 states that they've been in. 17 Q. Okay. How does the plan of 18 reorganization protect the immediate interest and 19 best interest of the policyholders? 20 A. It allows us to serve our policyholders 21 and members better. That's what's in the plan. 22 Q. How is that? What is the factual 23 foundation for your last statement? 24 A. So we believe that, again, we will be 25 both a more effective and efficient company. We 27 1 will be able to spread our costs out at a larger 2 membership base, so the cost per member will be 3 lower, and that we'll have better resources and 4 tools to help our members stay healthy, to help our 5 policyholders stay healthy, and over time, help keep 6 the rise in health care costs down. 7 Q. And that's solely because of the purchase 8 by Elevance; is that accurate? 9 A. It's to allow us to be part of a larger 10 organization that has greater resources and 11 capabilities. 12 Q. And the larger organization that has 13 greater resources and capabilities is Elevance? 14 A. It's Elevance. 15 Q. What is the immediate interest that I'm 16 going to receive by this? Let's say between now and 17 December of 2024, what's the immediate interest that 18 I'm going to get? 19 A. So it will take us approximately two 20 years to migrate our operating platform from the one 21 we have now to the Elevance so some of the benefits 22 that you will get don't occur until we can combine 23 operations. And again, that's about a two-year 24 process. I don't have committed to memory what the 25 schedule is over those two years. It is unlikely 28 1 that on day one we will have major operational 2 changes. It's going to take a time to do that 3 operational integration. 4 Q. Can you tell me what interests of mine 5 are going to improve between now and let's say 6 December the 1st? 7 A. Again, I think I just answered that 8 question. 9 Q. Would you mind answering this question? 10 A. So it is going to take us approximately 11 two years. 12 Q. Let me rephrase it. Let me make sure 13 it's clear. 14 How is my health insurance going to 15 improve between February the 7th and December the 16 1st if Elevance buys Blue Cross Blue Shield of 17 Louisiana? Am I going to get any benefit from that? 18 Q. You'll get the benefit of the improved 19 operations as we're able to implement those over 20 time with the integration plan. 21 Q. How is Tut Kinney going to benefit from 22 that? 23 A. You know, sir, it's going to depend on 24 the details of that plan and what your needs are. 25 So, again, I don't have committed to memory what 29 1 that schedule is. But for example, we believe that 2 we will get access during that integration plan to a 3 concierge service for people with cancer and rare 4 illnesses that I do not have today that helps them 5 navigate. If you are unfortunate enough to need 6 that service, that service would be available to 7 you. I can't give you the exact date, but that 8 would be a very concrete example of a program that 9 they have up and running today. 10 Q. They as Elevance? 11 A. They is Elevance. They have a much more 12 comprehensive health care application, digital 13 health care application called Sydney that they make 14 available for their members that I don't have today 15 that has a lot of functionality that I don't have. 16 So you would get benefit from all of that. And as 17 we migrate in, there will be very concrete services 18 that will help you manage your health in a better 19 and different way than you have today. And programs 20 are available to you that you don't have access to 21 today, and that we have not had the resources to 22 implement. And that's going to take place between 23 now and December the 1st? 24 A. No, sir. I told you there's a schedule 25 that I don't have committed to memory. It's not all 30 1 going to be done. I said it's going to take two 2 years to fully integrate the operations of the 3 company. 4 Q. And after that, what are my long-term 5 benefits? 6 A. Your long-term benefits are that you'll 7 be able to have advantage to tools that keep you 8 healthier, and over time, that will keep premiums 9 down compared to what they would be if we do not do 10 the transaction. 11 Q. And all of this is dependent on Elevance, 12 correct? 13 A. This is dependent on the company 14 implementing those changes. Well, let me see if I 15 can go through this list real quickly. Elevance is 16 going to provide cancer care navigator and cancer 17 concierge service; is that right? Care? 18 A. They have that service today. 19 Q. Elevance has that today? 20 A. Right, but again these programs are not 21 immediately available because the operating 22 platforms are not changed immediately. We can't 23 change the operations of the company overnight. It 24 will take about two years to do the operational 25 integration. 31 1 Q. Okay. So then Elevance is also going to 2 provide, or maybe they have it available today, 3 personalized care programs for diabetes patients? 4 A. Yes. 5 Q. They have that available today? 6 A. They do. 7 Q. Okay. And they're going to provide 8 maternal health solutions focused on maternal 9 morbidity; is that correct? 10 A. They have programs for high-risk 11 pregnancies, yes. 12 Q. In existence today? 13 A. In existence today. 14 Q. But those won't be available for some 15 period of time? 16 A. Within two years. 17 Q. Okay. And they have a full suite of 18 market-leading behavioral health services, correct? 19 A. They've invested $4 billion in a whole 20 health platform that focuses on physical health, 21 behavioral health, support for social determants for 22 mental health and also integrated pharmaceutical 23 management of those conditions. 24 Q. So, I want to make sure, not that I 25 understand it, but I want to make sure that I am 32 1 getting accurate answers from you on what the 2 benefits of this plan are. And the last things that 3 I just read to you, 1, 2, 3, 4, these are products 4 that Blue Cross of Louisiana intends to provide to 5 me if Elevance stays in the marketplace; is that 6 correct? 7 A. I don't know that the products, I think 8 some of those are services that will be available 9 to you as a member. 10 Q. But the products and services that I just 11 listed are all going to be contingent on Elevance 12 writing insurance in Louisiana; is that correct? 13 A. Well, it would be contingent on LHSIC 14 writing insurance in Louisiana. 15 Q. It's owned by -- but the determination of 16 the continuation of those plans are going to be made 17 by Elevance, who's the sole stockholder of what do 18 you call it, LHIC? 19 A. Yep. Louisiana Health Service Indemnity 20 Company is the parent entity. Is our parent 21 company. 22 Q. So all of the benefits that I'm going to 23 get are dependent on Blue Cross Elevance writing 24 insurance in Louisiana forever? 25 A. I would say that there is no reason to 33 1 believe that Elevance is not going to continue 2 writing insurance in Louisiana. I mean, they 3 continue to write insurance in their other states, 4 so I'm confused by the question. 5 Q. What benefits is Blue Cross giving me in 6 this plan of reorganization that are independent of 7 Elevance? 8 A. So the benefits of the plan of 9 reorganization are dependent on us becoming part of 10 Elevance? 11 Q. A hundred percent, correct. 12 A. I mean, the benefits of the plan of 13 reorganization are related to us becoming part of 14 Elevance. I'm not sure I understand your question. 15 Q. Well, let me ask it again this way, maybe 16 it'll be easier to understand. 17 What benefits that are completely 18 independent of any benefits that Elevance is going 19 to give me, what benefits is Blue Cross of Louisiana 20 giving me as a result of this plan of 21 reorganization? 22 A. The categories of benefits that I've said 23 before are the ability to keep you healthier over 24 time and the ability to keep your premium increases 25 lower than they otherwise would be. 34 1 Q. And those two things that you just said 2 though are dependent on Elevance, correct? 3 A. So we would try to do those -- we were 4 going to try to keep you healthy and we're going to 5 do the best job we can to keep your premium increase 6 as low as they can be anyway. But our ability to do 7 that effectively will be better as part of Elevance. 8 So you get the benefit of a bunch better product and 9 services as part of Elevance. 10 Q. I don't want to badger you, you're 11 obviously a very important person in the community. 12 What I'm trying to find out is if we push all of the 13 benefits that you've been talking about that 14 Elevance is going to give us. And we push all of 15 those to one side. I'd like to know what Blue Cross 16 Blue Shield of Louisiana is going to do for Tut 17 Kinney as a result of this plan of reorganization 18 that has nothing to do with Elevance. 19 A. I don't, I really don't understand that 20 question. 21 Q. What benefits, have you articulated any 22 benefits that Blue Cross Blue Shield is going to 23 give me that are unrelated to Elevance? 24 MR. O'BRIEND: 25 Okay. This has been asked and 35 1 answered many times. This has been asked and 2 answered. He's answered it one last time and 3 then we're going to move on and we're going to 4 end the deposition. 5 MR. KINNEY: 6 I'm fine. Let me just say this as 7 best as I can. If you want to end the 8 deposition, you can take your client, pick him 9 out of here any way you want. And then we're 10 going to have to go back and we're going to 11 have to see if the questions in any way gave 12 rise to any ability to shut down a deposition. 13 I don't know where shutting down a deposition 14 is part of the concept, but that's certainly 15 not my intention. 16 MR. O'BRIEN: 17 We can certainly call the hearing 18 officer and let him read the transcript. He 19 can make that determination. He's only 20 available to 11:30. 21 MR. KINNEY: 22 If that's what you want to do, have 23 at it. 24 BY MR. KINNEY: 25 Q. Is there any benefit going to the members 36 1 and policyholders as a result of this plan of 2 reorganization that is not dependent on Elevance? 3 A. So as I understand it, the plan of 4 reorganization is -- the benefits of the plan of 5 reorganization come out of us becoming a part of 6 Elevance. And if we do not become a part of 7 Elevance, those specific benefits related to the 8 plan can't happen because they are articulated as a 9 byproduct of us becoming part of Elevance. So if 10 the transaction doesn't happen, the company will 11 continue to do business as it's done business 12 before, but you will not get the benefits that come 13 from the transaction. So there are no transaction 14 benefits that can happen if the transaction does 15 not happen, because those benefits are specifically 16 related to the transaction. 17 Q. Does Blue Cross they take people that are 18 qualified to be insured? If I knock on the door in 19 six months and I'm otherwise qualified, you're going 20 to take me as an insured? 21 A. I don't understand. 22 Q. Are there any restrictions on who you 23 accept as an insured and who you reject? 24 A. I mean, we have guaranteed access 25 products that I think have very limited 37 1 restrictions. There are requirements for certain 2 policies. 3 For example, in the individual market, I 4 can't -- if you miss the open enrollment period, by 5 law, I'm not allowed to take you in outside of that 6 unless you meet the specific qualifications of a 7 special enrollment period. So there are 8 restrictions on when we can take in people. I'm 9 not allowed to take in a Medicare Advantage member 10 outside the annual enrollment period. So there are 11 very specific limitations on when people can enroll 12 and can't enroll or not enroll that are set by the 13 government and we abide by those. 14 Q. Okay. I assume, or may I assume, that 15 it's to the benefit of Blue Cross to have as many 16 policyholders as possible to get an economy of 17 scale. Is that an accurate statement? 18 A. I mean, generally, we have been committed 19 to serving everybody in the state of Louisiana to 20 the extent that we can. 21 Q. Well, in a year, 367 days, if this plan 22 goes through, a year and change, and somebody knocks 23 on the door of Blue Cross Blue Shield of Louisiana 24 to get the insurance, they are going to have the 25 opportunity to get the insurance that Elevance is 38 1 going to be providing to Blue Cross. Is that 2 accurate? 3 A. So I mean, some of the rules I just 4 mentioned don't change as the basis of the 5 transaction. The enrollment criteria for the 6 federal exchange and for Medicare Advantage, for 7 example, don't change. So nothing about those 8 eligibility rules changes with this transaction. 9 Q. What's the benefit to me as a member 10 today that's not going to be available to David 11 Rubin who knocks on the door two years from now? 12 What's going to be unique to me as a member? 13 A. Again, I'm not sure I understand you. 14 Q. Let's go back and try this. People are 15 going to be able to get insurance with Blue Cross 16 Blue Shield in 18 months; is that correct? 17 A. They will be able to get insurance in 18 18 months, yes. 19 Q. And the rate they pay, will that be the 20 same rate that Tut Kinney is paying today? 21 A. So I think I've said to you, sir, all 22 policies get a rate renewal every year on the 23 anniversary of the policy, and that rate will change 24 on the anniversary of the policy. It's possible in 25 a few cases rates don't change for some customers, 39 1 but the vast majority of them change and the vast 2 majority of them go up over time because of medical 3 inflation. 4 Q. Okay. Could you tell me what are the 5 benefits that are going to inure to me that are not 6 going to be available to somebody that enrolls in 7 this insurance plan, same insurance plan, same 8 restrictions two years from now? 9 A. I think I've said this before, the 10 benefits to you are that over time you will pay a 11 lower premium if this transaction happens than if it 12 does not happen. So your premiums may go up, but 13 they will go up less. So if we do not do this 14 transaction, it is our belief that both because of 15 administrative scale and the ability to help people 16 stay healthy and keep medical costs down, that you 17 will pay more over time if we remain as an 18 independent single-state blue plan than if we are 19 part of Elevance Health. And that is a benefit to 20 you. So you save money and you stay healthier. 21 Those are the two benefits. 22 Q. And I'm going to save more money than the 23 person that knocks on the door in the same insured 24 capabilities that I have in two years. I'm going to 25 have a cheaper premium than a new customer in two 40 1 years; is that accurate? 2 A. No. If, to use an example, we charge the 3 same, and the example I used in some other testimony 4 is if you're a 42-year-old man, non-smoker, if 5 you've been a member for 10 years or you've been a 6 member for the first time, that rate that we file is 7 the same. It's the same rate for a 42-year-old 8 person. That's how we file the rate. And that 9 rate, we believe, if we do this transaction, will be 10 lower over time than if we don't. But all 11 42-year-old men that are non-smokers, that enroll 12 in the individual exchange, they pay the same amount 13 for a given policy year. 14 Q. So, there is no benefit to me on any 15 policy premiums that's not going to be the same as 16 someone like me that would get insurance in two 17 years? 18 A. Well, the benefit to you is that if we 19 don't do this transaction, you will pay more. So 20 the benefit to you if we do this transaction is you 21 will pay less. So you get that benefit. 22 Q. Is there any benefit to any member that 23 will be different to a benefit that any new insured 24 will get? Will they have the same opportunities to 25 get the same benefits? 41 1 A. So if we have -- if people are enrolled 2 in the same product in a given policy year, they 3 have access to the same services whether they're an 4 existing customer or a new customer. I mean, our 5 products and services vary, so not what's available 6 to you is different depending on the product that 7 you choose, but if two people are in the same 8 product, they get the same benefits from that 9 product. 10 Q. Blue Cross, the board of directors of 11 Blue Cross, did they make a decision to only give 12 the members 9 percent of the cash value of this 13 transaction? 14 A. So the board of directors approved a plan 15 of reorganization which has that in it. 16 Q. That's not my question. 17 Did the board make a decision to divide 18 the cash assets of this transaction, 9 percent to 19 the members and 91 percent to Axcel Louisiana. 20 A. So, that is in the full plan and the 21 board approved the full plan. 22 Q. Did the board make the decision to divide 23 the cash assets from this transaction on a 9 percent 24 to the members, 91 percent to the Axcel Foundation. 25 Did they make that decision? 42 1 A. Okay. That is part of the overall plan 2 and the board approved that plan. 3 Q. Did the board make an independent 4 decision to divide the assets 9 percent to 91 5 percent? 6 MR. O'BRIEN: 7 Objection. Asked and answered. Go 8 ahead and answer, Dr. Steve. 9 THE WITNESS: 10 So the board approved a plan that 11 was formed by a variety of experts. I don't 12 know the details, but there are 13 demutualization laws in Louisiana that we 14 needed to follow. It included getting expert 15 opinion. So I would say no, the board did not 16 have an independent decision outside of the 17 process of having the management team, the 18 outside advisors, the experts put together 19 the plan in accordance with the law and that 20 plan as put together has that distribution in 21 it with detailed explanation for why that's 22 the case and the board approved that plan. 23 BY MR. KINNEY: 24 Q. Let's forget about the plan. I'm not 25 asking you about the plan. I'm asking you about a 43 1 specific board meeting or series of board meetings. 2 Was a discussion held on what percent was 3 going to the members and what percent was going to 4 the foundation? Was that discussed in board 5 meetings? 6 A. I mean, I don't remember specifically the 7 nature of each discussion, but obviously if the 8 board approved the plan that has it in it, there 9 would have been a discussion about the plan. 10 Q. You were present for the determinations 11 of the 9 versus 91? 12 A. I'm going to answer this again. The 13 discussion about the plan included all aspects of 14 the plan of reorganization, sir. 15 Q. All I'm asking you about to save time is 16 the division of 9 percent versus 91 percent. 17 MR. O'BRIEN: 18 Let him finish his answer. 19 THE WITNESS: 20 That was a part of the plan. So it 21 was part of what was discussed. 22 BY MR. KINNEY: 23 Q. Did some members of the board say that 24 they thought that the members should get more than 25 9 percent? 44 1 A. I don't recall the specific discussions. 2 I mean, again, this was based on a methodology that 3 was developed in detail, not by the board. This is 4 not methodology that is developed in consultation 5 with experts. There was no preconceived or 6 arbitrary basis for this. 7 Q. Which expert gave you the statement that 8 it should be 9 versus 91 before the board ever 9 considered that number? What expert told you that? 10 A. So the -- that was a formula calculation 11 that came out of work that was done and largely the 12 Chaff & Associates, the investment banker, and as I 13 understand it, the Louisiana statute says that the 14 aggregate amount of policyholder consideration 15 should be based on advice from a qualified 16 investment banker. 17 Q. What expert gave the board a 18 determination that the members should only get 9 19 percent of the cash assets from this transaction? 20 A. I think I just answered, sir. 21 Q. It was Chaff? 22 A. Yes, sir. 23 Q. They were the first ones to make the 24 determination of 9 versus 91? 25 A. I wasn't privy to all the discussion so I 45 1 couldn't tell you exactly how the back and forth 2 went on that. 3 Q. You couldn't tell me as a board member 4 the first time the 9 percent came up at a board 5 meeting? 6 A. Sir, we've been at this process for 7 three, our board, we've been talking about this 8 transaction for a long time. I can't remember 9 specific dates. 10 Q. So it's 100 percent -- I'm sorry, let me 11 rephrase that. 12 The concept of 9 percent to the members, 13 91 percent to this new foundation is solely the 14 product of Chaff and Associates; is that right? 15 A. No. 16 Q. Okay. Who else participated in the 17 determination of the 9 versus 91? 18 A. I want to be clear. Nobody came up with 19 that arbitrarily. So that number is a byproduct of 20 the methodology. It is not a number that anybody 21 picked. 22 Q. Did Chaff recommend 9 percent versus 91? 23 A. Chaff recommended a methodology. 24 Q. Did Chaff recommend 9 percent? 25 A. Chaff recommended a methodology. 46 1 Q. And what percentage of distribution of 2 the assets was a product of the Chaff 3 recommendation? 4 A. The methodology came up with the 5 policyholders getting between 9 and 10 percent. 6 Q. Isn't it accurate, Steve, that the Chaff 7 was given the 9 and 91 and that they didn't 8 recommend it? Isn't that an accurate statement? 9 A. I don't think that's an accurate 10 statement. 11 Q. So if I ask Chaff, did you come up with 12 the 9 percent, they're going to say yes or no? 13 A. As I said, I don't think anybody came up 14 with the 9 percent. I think Chaff looked at a 15 methodology and that methodology is what produced 16 the percentages. 17 Q. Okay. So Chaf is solely responsible for 18 the 9 percent, not Deloitte, not Kane, not anybody 19 else. So before the board considered anything, 20 Chaf gave you a determination of 9 percent. Is that 21 accurate? 22 A. No. 23 Q. So there were obviously discussions 24 between people at Blue Cross and Chaf about the 25 methodology. I don't have all those committed to 47 1 memory. Chaf wouldn't come in and say, without any 2 information from the company, here it is. So there 3 was obviously discussions with Chaf about the 4 methodology that ultimately led to the final 5 conclusion. 6 Q. And at what board meeting, what point in 7 time did the board approve a specific determination 8 of 9 versus 91? 9 A. So the board would have approved that 10 when they looked at the final plan of 11 reorganization. 12 Q. That's the first time 9 percent came up 13 when they approved the final plan in December of 14 2022? 15 MR. O'BRIEN: 16 Objection. Mistakes the previous 17 testimony. Go ahead and answer. 18 THE WITNESS: 19 There were lots of discussions about 20 the methodology. You asked me when it was 21 approved. 22 BY MR. KINNEY: 23 Q. When was it approved? 24 A. When the final plan was approved. 25 Q. And that was in December of 2023? 48 1 A. I believe -- 2 Q. Or 22, I'm sorry. 3 A. Yeah, I believe that was. I'd have to 4 look at the minutes, but I think that was it. 5 Q. I'm going to wrap up this line of 6 questions, but I want to make sure of this. The 7 board didn't give Chaf the 9 percent. Chaf and 8 their methodologies were given to the board. Is 9 that accurate? 10 A. No, sir. What I've told you is Chaf 11 didn't calculate the 9 percent, they approved a 12 methodology by which to calculate the percentage. 13 Q. What in the determinations by the board, 14 what board members are going to have any gain if 15 this transaction goes through? 16 A. I don't believe any board member has any 17 gain if the transaction goes through. 18 Q. You don't think any board members had any 19 conflict of interest in voting for this plan of 20 reorganization? 21 A. I don't think any board members get any 22 gain, so I don't, you know, I don't think they'll 23 get any gain from this transaction. 24 Q. What about getting a million dollars from 25 the advisory board if this plan goes through? Is 49 1 that a benefit to the board members? 2 A. They're not getting a million dollars. 3 Q. That changed, didn't it? 4 A. No. 5 Q. What are they going to get? 6 A. So, some board members are going to go 7 over to the foundation or trust. I believe at least 8 one board member will retire due to age limitations 9 and the other board members will go to the advisory 10 board. The advisory board appointments are for one 11 year. 12 Q. And they're going to get paid for that? 13 A. They will get paid for that. 14 Q. And the advisory board only comes into 15 existence if this transaction gets approved? 16 A. That's right. 17 Q. Okay. And they're not going to have to 18 get elected every year by the members of Blue Cross 19 of Louisiana, are they? 20 A. So I don't recall specifically their -- 21 it's a one-year appointment, so they get appointed, 22 they have to be reappointed every year. 23 Q. So for one year they're going to get 24 $100,000 or such? 25 A. Well, they actually get paid now, and so 50 1 if the transaction doesn't happen, they get paid, 2 they actually will get paid more if the transaction 3 does not happen and they stay on the board than if 4 they go to the advisory board. 5 Q. Is there any benefit to Mr. Barfield by 6 being the president of this foundation of 7 Accelerate? 8 A. Is he going to receive a salary? 9 Q. As of right now, they're all unpaid. 10 Q. Is he going to receive a salary was the 11 question. I didn't ask you the question, is he 12 being paid now? Let's see if we can sort of narrow 13 down the responses. Okay. Let's restate the 14 question so there's no ambiguity. 15 Will Mr. Barfield get paid as a director 16 of the Accelerate Louisiana initiative? 17 A. That has not been decided. 18 Q. Has it been discussed? 19 A. The question of whether the board members 20 on ALI will be paid has been discussed and no 21 decision has been made. 22 Q. Let's talk about any benefits -- you're 23 on the board, correct? 24 A. I'm on the board. 25 Q. What benefits are there to you if this 51 1 plan gets approved? 2 A. There's no benefits to me. 3 Q. Do you have a contract for your 4 employment? 5 A. I do. 6 Q. Okay. Will anything in that contract be 7 triggered or will you have the opportunity to 8 trigger anything in that contract if this plan gets 9 approved? 10 A. I mean, I stay on the board. I'm 11 actually the only board member that stays on the 12 board. 13 Q. Just answer the question, please. 14 A. I'm not aware of any. There's nothing in 15 there that triggers with the transaction. 16 Q. Do you have anything in your current 17 contract that says if Blue Cross is sold, you can do 18 certain things or contingencies? 19 A. No, there's nothing in there. 20 Q. How much do you get paid? 21 A. My salary is a little over $1.1 million. 22 Q. Who paid for you to go to the Louisiana 23 Mardi Gras? 24 A. The company paid for me to go to that 25 event. 52 1 Q. And while you were in Washington, you 2 were lobbying for the approval of this plan? 3 A. I had conversations with a whole variety 4 of people on a whole range of issues. And did you 5 have conversations with anybody about the plan of 6 reorganization while you were in Washington Mardi 7 Gras? 8 A. Not specifically about the plan of 9 reorganization. 10 Q. Have you had any conversations with Tim 11 Temple about the plan of reorganization? 12 A. We met with him and gave him the 13 information that had already been filed with the 14 Louisiana Department of Insurance so that he would 15 have that on his transition team. 16 Q. When did you meet with him? 17 A. It would have been -- he got announced at 18 the commissioner-elect in August, so it would have 19 been after that and before the end of the year. 20 Q. How many times have you met with him? 21 A. On that, I think we had one meeting with 22 him to give him that information, and I think he had 23 some follow-up questions that we talked to him 24 about. 25 Q. Face-to-face meetings. How many meetings 53 1 did you have with Tim Temple? 2 A. I can't remember if the second one was a 3 meeting. I don't recall. I mean, I remember we 4 only scheduled one meeting to give him the 5 information. 6 Q. I'm not talking about scheduled meetings. 7 How many times -- let me rephrase it this way and 8 make it easier. 9 How many times have you discussed in 10 person or on the telephone this plan of 11 reorganization with Tim Temple? 12 A. I don't know the specific number, it 13 would be a handful. I mean, a few. I don't 14 remember specifically. 15 Q. A handful is five fingers, so about five 16 times? 17 A. It could be two, three. I have seen him 18 in passing at various public events. So if you 19 count those. I mean, we didn't specifically talk 20 about the transaction at those. The only specific 21 meeting that we had to give him information on the 22 plan of reorganization is when we shared the 23 documents that were filed with LDI. 24 Q. The other handful of meetings you had 25 with Tim Temple, what did you discuss? 54 1 A. Well, he's been a neighbor so I see him 2 for non-work-related issues. I've known him since I 3 moved here. 4 Q. Let's go back and see if we can establish 5 that you had a handful of meetings with Tim Temple. 6 Okay? Now, let me make sure the record is clear. 7 Of those handful of meetings, how many of 8 those meetings included a discussion of the plan of 9 reorganization? 10 A. Yeah. I remember one meeting scheduled 11 to talk about it, and there may have been -- I know 12 there was a discussion that we had, and I don't 13 recall specifically, I know we talked on the phone 14 about it. He had some questions and we actually 15 sent him some responses and writing to some 16 questions that he had. 17 Q. Did you discuss this with him at the 18 Mardi Gras in Washington? 19 A. We did not talk about the plan of 20 reorganization. We did talk about the process that 21 was underway, meaning that we were prepared to go to 22 the hearing. 23 Q. So you met with Tim Temple at the 24 Washington Mardi Gras and discussed the process of 25 the plan of reorganization; is that accurate? 55 1 A. No, I acknowledged to him that we were 2 going to becoming before the department. 3 Q. You said, hi, Tim, I'm going to be coming 4 in front of the department. What was the discussion 5 that you had with the arbiter? 6 A. It was in passing, sir. There was really 7 nothing other than I would see him at the public 8 hearing. 9 Q. Did any of your lawyers or lobbyists or 10 anybody on behalf of Blue Cross Blue Shield have any 11 discussions with Tim Temple other than the ones you 12 just talked about? 13 A. I don't know. 14 Q. You don't know. Did any of your staff 15 members go over to the Department of Insurance any 16 time between January 23rd and February 9th and talk 17 about this plan of reorganization? 18 A. I mean, we've had discussions with the 19 department on multiple occasions going back. Even 20 last year I know we've been to the department. 21 David Caldwell is here. I mean, David, we've met 22 with the department on multiple occasions about the 23 transaction. 24 Q. In the last year, have you been over to 25 Mr. Temple's home? 56 1 A. I believe I have. 2 Q. How many times? 3 A. A couple, probably. 4 Q. How many times has he been over to your 5 house in the last year? I'm not sure that he has 6 been to my house in the last year. 7 Q. But you're certain that you've been to 8 his house twice in the last year? 9 A. At least once. As I said, I've known him 10 a long time. I mean, I think -- I can't even 11 remember the date. But I mean, as I said, they're 12 neighbors so we see them on a regular basis. 13 Q. How many times do you know that Elevance 14 has met with Mr. Temple? 15 A. I'm not aware of when the met with him. 16 I mean I've only done meetings that I've been in. 17 Q. How many discussions have you had with 18 Jeff Landry about this plan? And when I say Jeff 19 Landry, the person, not the office holder. How many 20 times have you had a discussion with Jeff Landry 21 about this plan of reorganization? 22 A. I remember a meeting that we had with him 23 in Lafayette when he was attorney general. 24 Q. And what was the discussion about? 25 A. It was about the foundation. 57 1 Q. And who was at that meeting? 2 A. Angelique Friel was there, and Tim 3 Barfield was there. He had another member of the 4 attorney general staff. I'm not remembering his 5 name. Tim Barfield was there. Tim Temple was 6 there. I was there. 7 Q. So Tim Temple, Tim Barfield, Jeff Landry, 8 some of your staff? 9 A. I think we had one of our lawyers was 10 there. Who was that? 11 A. I think it was Mr. Patalano. 12 Q. Mr. Patalano, he was there representing 13 you? Acting as your lawyer? 14 A. He was there, yeah, I mean this was a 15 meeting with the Attorney General, so yes. 16 Q. So he was there lawyering for you, 17 correct? 18 A. He was there as the company's Chief Legal 19 Officer. 20 Q. What did y'all discuss? 21 A. We basically answered questions for 22 Attorney General Landry about -- largely about the 23 foundation. He wanted to talk about the foundation. 24 It was a meeting that he requested. 25 Q. He was negotiating with you? 58 1 A. He was asking questions about the 2 transaction at that time. 3 Q. And when did this meeting take place? 4 A. It would have been after the middle of 5 August at some point. I can look at my calendar. I 6 don't have the date memorized. 7 Q. In the summer? 8 A. No, I said to you it would have been 9 after the middle of August. 10 Q. Okay. How about a little closer date 11 than after the middle of August? 12 A. I don't specifically remember the date. 13 I don't -- I mean, I'm saying it was in -- it was 14 in -- probably would have been sometime closer to 15 August than December, but I don't remember 16 specifically the date. 17 Q. And Jeff Landry wanted certain things in 18 the operations of the Accelerate Louisiana 19 Foundation? 20 A. So that meeting, he was asking questions 21 about the foundation. 22 Q. Did he ask for a board seat? 23 A. He did not ask for a board seat. 24 Q. Was a board seat discussed at that 25 meeting? 59 1 A. I don't recall. I mean, it was mainly 2 him asking questions about the nature of the 3 foundation. 4 Q. Did Mr. Temple asked for a board seat at 5 that meeting? 6 A. No. 7 Q. When did you convey to Jeff Landry that 8 he was going to get a board seat on the Accelerate 9 Accel Foundation board? 10 A. I never had that discussion with him. 11 Q. Who did? 12 A. I don't know who had that discussion. 13 Q. Do you know when he found out he was 14 going to get a board seat? 15 A. I do not. 16 Q. Did you participate in offering that 17 board seat to Governor Landry? 18 A. I was not part of those discussions. I 19 believe the board seat, and I don't actually know 20 where the idea came from, arose from criticisms that 21 we got at the August legislative hearing between the 22 Senate and the House Insurance Committees where -- 23 and I would note it was raised there and after that 24 there was concern that there was no public oversight 25 involved in the foundation board. And so the 60 1 governor's appointee and also allowing the insurance 2 commissioner to have a non-voting, non-paid board 3 observer role or to address the criticisms we got 4 from a number of parties that there was no public 5 oversight involved in the foundation. And that came 6 from a wide variety of people. In fact, I remember 7 having that criticism shared with me by the 8 Louisiana State Medical Board. When I met with 9 them, I know that it was raised by a couple of other 10 people too, that there needed to be some public 11 oversight. So that was, in essence, giving the 12 governor an appointee and having the insurance 13 commissioner have a board observer role was to 14 create some public oversight and transparency. 15 Q. When you were discussing or answering the 16 question how many times you met with Commissioner 17 Temple to discuss this plan of reorganization, and 18 you said a handful of times, did you include that 19 meeting with Tim Temple and Jeff Landry in 20 Lafayette? Did you include that in the handful or 21 was that a separate meeting? 22 A. So when I answered the question before, I 23 was thinking more about the meetings that we had 24 with him to give him the information about the 25 transaction. But that would have been an additional 61 1 meeting. But again, we only had the one meeting 2 with Jeff Landry and Tim Temple on that. And that 3 was the one meeting in Lafayette. 4 MR. KINNEY: 5 I am in now way finished questioning 6 you, but in collegial fashion, I'm going to 7 turn it over to my co-intervener but I don't 8 want to make sure that I'm not finished with 9 my questions but because of the press of time 10 I want to make sure that Mr. Bradford has the 11 opportunity. I'd certainly like to continue 12 questioning and I'd certainly like to continue 13 questioning about the relationship of Mr. 14 Temple and Mr. Landry in the meetings that 15 you've had with him. But I'll go ahead and 16 see if there's any time after Mr. Bradford. 17 MR. BRADFORD: 18 Thank you, Mr. Kinney. 19 EXAMINATION 20 BY MR. BRADFORD: 21 Q. Dr. Steve, I'm a policyholder or eligible 22 member. Been so for a long time. I'm just telling 23 you my standing with the company. I'm here as an 24 intervener on my own behalf. 25 And so one of the things I want to know 62 1 is what is the vote, the current vote right now on 2 this proposal of the eligible men? 3 A. So there is no vote. 4 Q. Nobody's voting now? 5 A. No. So people are giving their proxies 6 and that's not a vote. So the proxies can be 7 changed at any time. So the vote actually -- the 8 only vote that will actually occur on February 21st. 9 Q. What is the current proxies? 10 A. So we're not sharing that information. 11 Q. Do you have that information? 12 A. I don't have it right now. The reason 13 that we're not sharing it is that we don't want to 14 bias the process. 15 Q. Do you have that? Does Blue Cross have 16 that information? 17 A. So Blue Cross has information on the 18 proxies, yes. 19 Q. Are you making telephone solicitations? 20 A. So there is a proxy solicitation firm 21 that is involved in trying to get proxies in. And 22 so we do mailings. 23 Q. Who is that firm? 24 A. McKenzie Partners. 25 Q. Are they the only firm? 63 1 A. So they're the main firm that we've 2 contracted with. I don't know if there's any 3 subcontractors, et cetera, on that. I'm not aware. 4 Q. You're not aware of any other firm other 5 than McKenzie. Have you talked about any other 6 firm? 7 A. So, they're the firm we've contracted 8 with to do the proxy solicitation. 9 Q. They're the only company that's 10 contracted to do it? 11 A. Yes. 12 Q. Only company that is entitled to do it? 13 A. I'm not sure what you mean by that. 14 Q. That you've given permission that they 15 make contacts. 16 A. Well, I said there maybe subcontractors 17 that I'm not aware of that -- I mean, for example, I 18 don't believe the mail house that sent out the 19 letters is McKenzie Partners, so they would have 20 contracted with the mail house. So there are other 21 people involved. They're the coordinators of the 22 proxy solicitation firm. 23 Q. Do you have a HIPAA release for McKenzie 24 or any other people that McKenzie hires? 25 A. Yes, so we would have a business 64 1 associate agreement with them for any information 2 that they need to do. 3 Q. Do you have that agreement? 4 A. Yes. 5 Q. Okay. Can you provide that agreement? 6 A. I don't know the answer to that. I think 7 it might be a confidential document. 8 Q. Do you have a conflict of interest 9 document, program, requirement that all your board 10 members, you and everybody else, and some of your 11 executives have to sign? 12 A. We do. 13 Q. Can we get a copy of that? 14 A. I don't know the answer to that either. 15 Q. You are on the board? 16 A. I am on the board. 17 Q. And do you -- have you read the articles 18 of incorporation from Blue Cross? 19 A. I have. 20 Q. Okay. Do you have to be open and deal 21 with policy members in an open and accurate and fair 22 way? 23 A. We would try to be open and accurate with 24 our members. I don't know that there's any 25 reference to that in the articles of incorporation 65 1 per se. 2 Q. Do you have the highest ethics, I think 3 you've classified, you will deal with the members 4 with the highest ethics? 5 A. So, we intend to be an ethical company, 6 yes. 7 Q. Okay. Do you have a requirement in your 8 articles saying that you will deal in the highest 9 manner? 10 A. Yeah, again, if that language is in 11 there, I don't recall it by memory, sir. We do have 12 code of conduct for the company that has an 13 expectation that we will conduct business in an 14 ethical way. That is in our code of conduct that we 15 have as a company. 16 Q. I'm reading right here, and if you need 17 to see, I only have one copy. It says, to conduct 18 through the board of directors, corporate officers, 19 and employee, the operations of the company on the 20 highest ethical plane in all of its phases of 21 operation including it's relationship with members. 22 A. Okay. 23 Q. And with the government. What does 24 highest ethical plane mean to you? 25 A. I mean, I think it's self-explanatory. 66 1 Q. That means the highest, the best, nothing 2 less; is that right? 3 A. I mean, the words are what they are, sir. 4 Q. And if you have a conflict of interest, 5 you would have to disclose it and the extent of that 6 conflict, wouldn't you? 7 A. So we have an annual conflict of 8 disclosure process at the company. 9 Q. Did you disclose your conflict of 10 interest in this, I guess, pro whatever it is -- 11 reorganization? 12 MR. O'BRIEN: 13 Objection. Blacks foundation. Go 14 ahead and answer if you can. 15 THE WITNESS: 16 I'm not sure I have a conflict of 17 interest. 18 BY MR. BRADFORD: 19 Q. Does any of you board members have a 20 conflict of interest? 21 MR. O'BRIEN: 22 Objection. Go ahead and answer. 23 THE WITNESS: 24 Not that I'm aware of. 25 BY MR. BRADFORD: 67 1 Q. Do you have any contractors working for 2 you, name of, AIM Incorporated, AIM? It's an 3 Elevance. 4 A. Oh, AIM, I'm sorry, American Imaging 5 Management, yes. 6 Q. Okay. What do they do for you? 7 A. They do some work on prior authorizations 8 for selected services. It started with regard to 9 high-cost imaging, but they do some additional 10 things. So they do some prior authorization work 11 for us. 12 Q. They can say we're denying your claim for 13 whatever reason? 14 A. So, they would -- yeah, so if the prior 15 authorization is denied, then that would say the 16 benefits are not payable. 17 Q. Okay. Do they do all of that type of 18 work for your company, like a subcontractor? 19 A. No, they do a limited amount. We do a 20 lot of it ourselves. 21 Q. Do you have a contract with them? 22 A. We do. 23 Q. What about any other Elevance like 24 WellPoint? Do you have a contract with them to do 25 things on medical prescription issues? 68 1 A. No. We have a joint venture with them. 2 We have a joint venture with Elevance. It's Healthy 3 Blue. So Healthy Blue is one of the Medicaid 4 managed care organization that contracts with the 5 state is a joint venture between Elevance and -- 6 Q. So you have an actual partnership with 7 Elevance and have Healthy Blue? 8 A. Yes, since 2017. 9 Q. And when you sell -- if you sell Blue 10 Cross to Elevance, Elevance will be the sole owner. 11 The company that you run right now will not have any 12 ownership interest in the company that buys you. 13 A. So that company was 100 percent owned by 14 Elevance as a state contract originally. At the 15 time it was called Amerigroup of Louisiana. So when 16 they got the state contractm they were 100 percent 17 on by Elevance as Amerigroup of Louisiana. We then 18 did a joint venture with them, obtained a minority 19 interest. And they've been -- so they went from 100 20 percent interest to majority interest. And yes, our 21 minority interest would go over to them and they'd 22 be back to 100 percent interest as they were 23 initially. 24 Q. Let me ask you this. I sent some 25 interrogatories and requests for production of 69 1 documents to Blue Cross. Did you see their answers? 2 A. I'm not familiar specifically with that. 3 That would have probably gone through our legal 4 department. 5 Q. Your attorney provided that to me today. 6 Did you see these answers to the production and 7 request for interrogatories? 8 MR. O'BRIEN;. 9 They were provided to you at your 10 request, although they were sent to you by 11 e-mail and served on February 2nd. And that's 12 my signature on the document. 13 THE WITNESS: 14 No, I mean, I wasn't part of this 15 response. 16 MR. O'BRIEN: 17 We've got two minutes, gentlemen, 18 before the next witness. I know we're on a 19 tight schedule. And I don't know if Mr. Rubin 20 or anyone else has a question for the witness. 21 MR. KINNEY: 22 I can't do anything in two minutes. 23 MR. BRADFORD: 24 I can do some more until you stop 25 because I got lots of questions. 70 1 MR. O'BRIEN: 2 You got one minute. 3 BY MR. BRADFORD: 4 Q. Okay. Do you, in your articles, one of 5 the things that you're supposed to do is provide the 6 lowest net cost prepaid health and accident 7 insurance coverage, the lowest that you can. Do you 8 know if Elevance will have the same obligation? 9 A. So I don't know what their obligations 10 would be per se, but as I've said before, if we 11 don't offer the best products at the best price, we 12 lose our customers. 13 Q. I'm saying that you have an obligation to 14 do that. 15 MR. O'BRIEN: 16 This is the last question. 17 BY MR. BRADFORD: 18 Q. And you don't know, you're telling me, 19 you don't know of anything that Elevance would be 20 required to do. They would use market 21 considerations and putting the specific price; is 22 that correct? 23 A. I would assume they would offer the most 24 competitive price that they could just like we do. 25 MR. O'BRIEN: 71 1 Okay. And thank you for your time 2 gentlemen. 3 MR. BRADFORD: 4 No I'm going to ask the questions. 5 MR. O'BRIEN: 6 He did answer the questions. 7 MR. BRADFORD: 8 I'm going to ask another question. 9 MR. O'BRIEN: 10 It's 11:30, sir. As per the 11 agreement, that's when the deposition ends 12 because we've go Mr. Barfield. 13 MR. BRADFORD: 14 I didn't sign no agreements. 15 MR. O'BRIEN: 16 You didn't send any objection to us. 17 MR. KINNEY: 18 There is no agreement. 19 MR. BRADFORD: 20 I'm going to ask the questions. 21 MR. KINNEY: 22 That is a just ballface lie. 23 MR. BRADFORD: 24 You can take him away. 25 MR. O'BRIEN: 72 1 We sent it to you and you didn't 2 object. You had plenty of time to object. 3 MR. KINNEY: 4 Let me say this: I would say the 5 product of our interrogation is very, very 6 satisfactory. 7 MR. O'BRIEN: 8 Thank you, sir. 9 BY MR. BRADFORD: 10 Q. I want to ask a question, put it on the 11 record. Dr. Udvarhelyi, will you state that 12 anything that you are talking about in the future is 13 speculation because it's in the future, you don't 14 know what the answer will be to anything that 15 happens in the future; is that correct? 16 MR. O'BRIEN: 17 Objection. Calls for speculation. 18 The witness has departed the room as per the 19 previous statement. The deposition was 20 scheduled from 10:00 to 11:30. 21 BY MR. BRADFORD: 22 Q. Dr. Udvarhelyi, let me ask you. 23 MR. BRADFORD: 24 I'm not going to go any further. I 25 would presume your objection to any of my 73 1 questions would be the same thing. You have a 2 time limit and you're not going to -- you took 3 the witness away, you're not going to recall 4 him for any more interrogations. Is that 5 correct? 6 MR. O'BRIEN: 7 Per the hearing officers, there's 8 one day scheduled for deposition. There has 9 been no notice of this deposition sent to us 10 or received by us. We have provided to the 11 hearing officer over a week ago that this 12 deposition that this witness would be provided 13 from 10:00 to 11:30. It is now 11:32. The 14 witness stayed after 11:30 to answer your 15 questions. The next witness is scheduled and 16 we have another deposition scheduled at 2:00. 17 These are multiple parties, multiple 18 engagements. I've received no objection to 19 that proposed schedule. This deposition is 20 complete. 21 MR. BRADFORD: 22 Let me put on the record that the 23 witness, in my case, in my questioning, I had 24 more and multiple questions about this act, 25 and that I am informed that I can't present 74 1 my case. It is my belief that I am being 2 denied the due process to ask questions about 3 what's going to happen, and to get questions 4 as to some of the answers I have put forward 5 to in my interrogatories and in my request for 6 documents. And I'd like to offer this and 7 file into evidence that I have not received 8 one document on this matter. And nothing to 9 answer my questions except objections. And 10 I'd like to mark that as Exhibit Number 1 to 11 this deposition. 12 MR. O'BRIEN: 13 And for the record, we received no 14 notification from Mr. Barfield to schedule any 15 deposition. We have received no motion to 16 compel or other response to the discovery 17 responses. And there's a fundamental 18 limitation in an administrative hearing 19 regarding procedural due process, which 20 requires the opportunity and notice and an 21 opportunity should be heard. 22 Mr. Bradford has received notice of 23 the hearing and is scheduled for the 14th and 24 15th. And as is clearly stated in both the 25 Louisiana Code of Civil Procedure and the 75 1 Federal Rules of Civil Procedure and Louisiana 2 Statute, the hearing officer has the right to 3 limit discovery. We sent over a week ago, 4 limitation and indication that this 5 deposition would be from 10:00 to 11:30. We 6 received no objection, no response. We have 7 conducted the deposition. It started on time 8 and it actually ran over. And at this point 9 we're running into the time for Mr. Barfield 10 to be deposed. 11 MR. KINNEY: 12 Wait a minute, I'm going to take 13 Barfield for an hour and a half. We're not 14 going to take five minutes off of our time. 15 Where's Barfield? Is he coming? 16 MR. O'BRIEN: 17 He's here. 18 MR. KINNEY: 19 Well, let's go. 20 MR. O'BRIEN: 21 We're waiting to conclude this one. 22 23 24 25