1 1 ROUGH DRAFT TRANSCRIPT 2 3 CASE NAME: LOUISIANA HEALTH SERVICE WITNESS NAME: TIM BARFIELD 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. Just for the record. Do you mind if I 4 call you Tim? 5 A. Don't mind at all. 6 Q. Tim, you serve on the board of Blue Cross 7 Blue Shield. And I use that for Louisiana Health 8 Service and Indemnity. 9 A. I do, yes. 10 Q. And you've been on the board for how 11 long? 12 A. Since late 2019, early 2020. 13 Q. Have you been one of the board members 14 that has been closely involved in the plan of 15 reorganization? 16 A. On the plan of reorganization, I don't 17 think I've been involved any more than any other 18 board member. 19 Q. Have you been more involved in the 20 formation and operation of the Accelerate Louisiana 21 initiative? 22 A. Yes. 23 Q. And you're the president of that? 24 A. I think the actual title is acting 25 president. 3 1 Q. Okay. And who appointed you to that 2 board? 3 A. I think we were appointed through -- I'm 4 trying to remember, but some resolution of the 5 incorporator, I believe, is the way it worked if I 6 remember correctly. 7 Q. And it was incorporated by Blue Cross? 8 A. On behalf of Blue Cross, by a law firm, 9 yes. 10 Q. And who gave the law firm the 11 instructions to incorporate it? 12 A. I don't know the answer to that. The 13 specific person, I don't know the answer to that. 14 Q. And that was authorized by the Board of 15 Directors of Blue Cross? 16 A. Yes, it was. And the Board of Directors 17 authorized the formation of a -- you mind if I just 18 call it Accel. 19 A. XL, I'm sorry? 20 Q. Accel. 21 A. We call it ALI, so that would be easier 22 for me, if you don't mind. 23 Q. And that was all paid for by Blue Cross? 24 A. Yes. 25 Q. And Blue Cross hired a lawyer in 4 1 Delaware? 2 A. The firm is Morgan Lewis, and I think 3 they have multiple offices so I'm not sure where the 4 actual lawyer was. 5 Q. And do you know what the objects and 6 purposes of Accel are? 7 A. Yes, I do. 8 Q. And what are those? 9 A. To improve the health and lives of the 10 people of Louisiana. 11 Q. I thought it was just a form as a social 12 welfare organization; is that correct? 13 A. Well that's part of it I believe yes. 14 Q. It's only one paragraph in the last 15 sentences to do anything that any other corporation 16 may do in Louisiana; is that correct? 17 A. I don't remember the specifics. 18 Q. Does that ring a bell? 19 A. Generally speaking, yes. 20 Q. Do you recall when it was first discussed 21 at the board level that only 9 percent of the 22 proceeds of the sale would go to the members. Do 23 you remember that? 24 A. Generally, yes. 25 Q. Whose idea was that? 5 1 A. I don't recall. 2 Q. Do you recall when that was? 3 A. Not specifically. 4 Q. No, I mean, we had a two-and-a-half-year 5 discussion that evolved over time. I can't remember 6 the specific time when that came up. 7 Q. Do you remember when the board voted 9 8 percent versus 91 percent to Accel? 9 A. So I remember when we approved the 10 transaction that was part of it, yes. 11 Q. What about just the 9 percent 91 percent 12 do you remember those discussions? 13 A. I do, yes. 14 Q. Were they heated? 15 A. There was a lot of discussion over that 16 and actually report and how they got to the numbers. 17 There were a lot of questions from a number of board 18 members as I recall and a lot of discussion around 19 that, yes. 20 Q. Did some board members say that all of 21 the money should have gone to the members? 22 A. There were certainly questions about how 23 this should all unfold, why that is, why it should 24 happen, but I don't remember a specific board member 25 saying anything or questions about it, but I don't 6 1 remember anybody saying that, no. 2 Q. So was this a decision made by the board 3 on the 9 percent versus the 91 percent? 4 A. Yes. 5 Q. You don't remember the particular date? 6 Let me see if I can give you a time frame that may 7 be easier. The actual plan, as I understand it, was 8 approved in December of 2022. Is that correct? 9 A. It was around that time. I can't 10 remember if it was December or January of 2023, but 11 it was in that time frame. 12 Q. January is when it was submitted to the 13 LDI, and I think it was approved in December of 14 2022? 15 A. That sounds reasonable, yeah. 16 Q. Isn't it accurate to say that the 9-91 17 was presented as an assumption to Chaff & 18 Associates? 19 A. I wouldn't know the details on that. 20 Q. See I thought my memory is that Chaff was 21 given some assumptions and based on those 22 assumptions, they gave an opinion. And my question 23 to you is: Wasn't one of those assumptions, the 24 division of the 9-91? 25 A. I did not have any discussions with Chaf. 7 1 I don't recall exactly what was given to Chaf. I do 2 recall generally speaking, it's been over a year, 3 you know, reviewing the Chaf report and getting a 4 report from them and a board meeting and those 5 things. But I don't remember the specifics of all 6 the -- what was given to them and the directions or 7 assumptions. 8 Q. The same thing for any other consultants. 9 Do you recall that the 9-91 was given to Cane? The 10 9-91 was given to that consultant and from that they 11 were to prepare a report? 12 A. I don't remember any of those 13 discussions. I was not part of what was the 14 discussions what was given to Cane that I recall. 15 Q. Isn't it an accurate to say that the 16 decision on the diving up of the proceeds was made 17 before you engaged the experts to render opinions? 18 A. My recollection is that the structure of 19 how the transaction was to happen in terms of a 20 portion going to the policyholders and a portion 21 going to a foundation or trust was talked about 22 earlier in the discussions and part of a lot of the 23 discussions relating to how these transactions are 24 done and our articles in corporation, the law here 25 in Louisiana, but I don't remember when the specific 8 1 amounts were determined or agreed. I do remember 2 the, you know, the discussions with Chaff genrally 3 now. But at the time, I remember the discussions 4 and all that. 5 Q. Did you go to the Washington Mardi Gras? 6 A. I did. 7 Q. Did Blue Cross pay for it? 8 A. No, my company paid for it. 9 Q. While you were at the Washington Mardi 10 Gras, did you have any discussions with anybody 11 about the plan of reorganization? 12 A. Not specifically about the plan of 13 reorganization, but about the transaction. I've had 14 a number of discussions with many people. 15 Q. Tim Temple? 16 A. I saw him in a bar one night and said 17 hello to him. I don't think we talked about 18 anything substantive other than to say hello to him 19 and his wife and that was about it. 20 Q. You all live in the same neighborhood? 21 A. We do, yes. 22 Q. How many discussions have you had with 23 Tim Temple about the plan of reorganization? 24 A. I saw him at Washington Mardi Gras last 25 year and we talked about it generally. He was 9 1 running for commissioner and I've offered to meet 2 with him if he wanted to to understand kind of my 3 role with the foundation and he's never met with me. 4 But other than that, we haven't discussed the 5 transaction or plan of reorganization. 6 Q. So you've not had any other meetings with 7 Tim Temple in which the plan of reorganization or 8 Accelerate was discussed? 9 A. No, not that I recall. 10 Q. Do you recall going to Lafayette and 11 meeting with Governor Landry and Tim Temple? You 12 recall that meeting? 13 A. In my recollection, I don't think Tim 14 Temple was in that meeting, but he could have been, 15 and I just don't remember that. 16 Q. Steve said he was. 17 A. He could have been. If he was, he didn't 18 take a material role in the meeting. Not the 19 meeting I was in at least. 20 Q. So you were at a meeting in Lafayette, 21 correct? 22 A. Correct, yes. 23 Q. Who was in the meeting? 24 A. The governor was in the meeting, 25 Angelique Friel with his office. He was attorney 10 1 general at the time, let me clarify that. Angelique 2 Friel, who I believe was the assistant attorney 3 general in charge of consumer protection, if my 4 recollection is correct. And another gentleman, 5 Dupuis, I think was his last name. 6 Q. Who? 7 A. Dupuis, another gentleman of the attorney 8 general's office. Dupuis, I'm trying to remember 9 his first name. It's the first and only time I've 10 met him. Lou Patalano, our general counsel of Blue 11 Cross Blue Shield. Dr. Steve Udvarhelyi was in that 12 meeting. Blair Todd of Elevance was in that 13 meeting. And I don't recall anyone else being in 14 that meeting. 15 Q. What was the purpose of the meeting? 16 A. The purpose of the meeting was this 17 followed the Attorney General's letter that was 18 presented at the joint meeting of the House 19 Insurance Committee and the Senate Insurance 20 Committee that happened in August. I believe you 21 were at that meeting. Where the governor asked us 22 to delay the transaction so they could understand it 23 better. And the purpose of that meeting was to 24 follow up on his request, as I recall. 25 Q. Did you all have any back and forth 11 1 negotiations in the course of the meeting? 2 A. I think it's fair to say that that was a 3 meeting where he kind of asked a lot -- he and his 4 team asked a lot of questions. We had a lot of 5 discussions about how we would proceed to have these 6 conversations and have discussions and negotiations 7 going forward. We may have had -- we may have 8 started talking about some topics and things like 9 that. 10 My appreciation of that meeting is just, 11 you know, these are the issues, how are we going to 12 go forward discussing these, that type of thing. 13 Q. You do know we just took Steve's 14 deposition, correct? 15 A. Yes, yes. 16 Q. Do you know that I discussed this topic 17 with him? 18 A. I do not know that, no. 19 Q. I just want to make sure we all 20 understand that there are some questions and answers 21 already in the record. 22 A. That's okay. I mean, that's my 23 recollection of the meeting. That meeting led to a 24 number of other conversations with the governor and 25 his staff for me and my role at Accelerate 12 1 Louisiana. 2 Q. How many of those meetings took place? 3 A. Three or four. 4 Q. And with whom did they take place? 5 A. The governor was in probably three or 6 four of those. There were other meetings with Ms. 7 Friel. There were other conversations I had with 8 the governor, usually over the telephone. That type 9 of thing. 10 Q. And the governor was, I think your 11 characterization was in the Senate hearing that 12 there were negotiations; is that correct? 13 A. Yeah, there were definitely discussions 14 and negotiations on different elements of what we 15 were doing. 16 Q. And he was asking for certain things. Is 17 that accurate? 18 A. At times, yes. 19 Q. And what were the things he was asking 20 for? 21 A. He was not comfortable with the 22 foundation. He preferred that we use a trust. He 23 wanted to know what the foundation was going to be 24 focused on. He understood the mission, but he 25 wanted to know what types of things the foundation 13 1 would be focused on. He did not want the foundation 2 to be involved in political activities and he asked 3 a lot about the 501c4 designation and why we didn't 4 have a 501c designation, that type of thing. 5 Q. That's it? 6 A. That's generally it, yeah. 7 Q. Did he ask for a seat on the board? 8 A. Not initially. Later that issue came up. 9 Q. Did Temple ask for a seat on the board? 10 A. Not that I know of, not to me. 11 Q. The governor was aware that board of the 12 Accel, ALI, was going to be a paid position, 13 correct? 14 A. We actually discussed it's not a paid 15 position but it potentially could be a position. 16 Q. And that was discussed with the governor? 17 A. Yes, it was. 18 Q. And did he tell you who he planned on 19 appointing? 20 A. Not until recently. 21 Q. And who does he plan on appointing? 22 A. I'd prefer not to disclose that name at 23 this time because I have not talked to her and I 24 don't know if she's consented to be on the board. 25 Q. Answer the question if you don't mind. 14 1 A. Misty Cordell? 2 Q. Who is Misty Cordell? 3 A. She's a resident of Monroe. She has 4 worked in the healthcare industry. She has a small 5 business. That's my general understanding of Ms. 6 Cordell. 7 Q. At any of these meetings that you had, 8 discussions with the Governor, was there ever a 9 discussion of whose money this was that it was 10 member money or Blue Cross Blue Shield money? Did 11 that ever come up? 12 MR. O'BRIEN: 13 Objection. You can answer. 14 THE WITNESS: 15 We generally discussed the structure 16 of the transaction, the split of where the 17 money goes and those things. 18 BY MR. KINNEY: 19 Q. So I'm trying to get a progression of the 20 negotiations. Was the governor saying I"m going to 21 oppose this unless you do X and Y? 22 A. I think if you go back to the letter that 23 the governor, the attorney general then, in all my 24 discussions with him, he asked us to slow it down so 25 that he could better understand the transaction and 15 1 better understand how things unfolded. He certainly 2 was clear that if we didn't slow it down and work 3 with him on understanding these things and looking 4 to these issues, that he could do something, I guess 5 litigation or something like that to slow it down. 6 So he was very clear initially at that first meeting 7 that he wanted to have discussions and look at all 8 these issues. And if we didn't want to play with 9 him, that he could play hardball. But, I think, 10 that was kind of the tone initially from the 11 governor, slow down let me look at these issues. I 12 don't think he said he was for or against it at 13 that time. He wanted to understand it better. 14 Q. Was it your understanding initially that 15 then Attorney General Landry was calling for some 16 of report or study of this transaction? 17 A. I didn't understand it like that, no. 18 Q. Do you know if any report or study has 19 ever been done about this plan from the Attorney 20 General's office? 21 A. I do not. 22 Q. How many times was Mr. Temple present 23 when the governor was there when you were having 24 these negotiations? 25 A. None that I recall. He may have been at 16 1 that meeting in Lafayette. If he was, he didn't 2 play much of a role. But I have never -- I don't 3 recall being in a meeting with Mr. Temple on this 4 transaction, personally being in a meeting with Mr. 5 Temple. 6 Q. Do you know if other members of the Blue 7 Cross Board have discussed the transaction with Mr. 8 Temple? 9 A. I recall hearing that Dr. Udvarhelyi had 10 talked to Mr. Temple at some time. 11 Q. And he gave you a report of that 12 conversation? 13 A. I think there was some general report 14 that he had a conversation with him and gave him 15 some background. 16 Q. Did he tell you that he was on board with 17 approving the transaction? 18 A. I don't think he ever said anything of 19 that nature. 20 Q. Did he say whether he was for it or 21 against it? Did he ever say anything about Mr. 22 Temple's feelings or judgment about this plan? 23 A. What I recall him saying about Mr. Temple 24 is that Dr. Udvarhelyi felt like he was going to 25 give it a fair consideration. 17 1 Q. Did he ever report to the board, let's 2 redo it again. 3 Did Udvarhelyi ever report to the board 4 that Mr. Temple was going to look favorably on this 5 transaction at any time? 6 A. Again, my recollection is that he 7 reported that he thought that Mr. Temple was going 8 to give this transaction a very fair consideration. 9 He wasn't prejudiced against our position. He was 10 going to be open to what we were going to present to 11 him. 12 Q. Let me try to ask a question and do the 13 best you can to either affirm my question or deny 14 it. Okay? 15 A. Yeah. 16 Q. Has Dr. Udvarhelyi ever told the board 17 that he thought Mr. Temple was going to look 18 favorably on this transaction? 19 A. I don't recall it being put in that 20 fashion. 21 Q. Okay. Well, what other fashion was it 22 other than he was going to look at it and understand 23 it? Wasn't there some discussion at the board level 24 that Dr. Udvarhelyi thought Mr. Temple was going to 25 look favorably or vote favorably in favor of this 18 1 reorganization? 2 A. I'll tell you how I took whatever Dr. 3 Udvarhelyi said. You know, and Dr. Udvarhelyi is a 4 very confident man, and I think he's felt all along 5 this is the right transaction for our company, but 6 he's never represented that Mr. Temple's made a 7 decision on his transaction whatsoever. 8 Q. Did he ever indicate to you or the board 9 that he thought Mr. Temple was going to be favorable 10 to this transaction? 11 A. So again, the way I've always took Dr. 12 Udvarhelyi's comments is that Mr. Temple was going 13 to be very fair in considering this transaction and 14 be willing to certainly understand our rationale and 15 reasons for doing this. Same thing I've said 16 before. 17 Q. And was it your understanding that 18 Dr.Udvarhelyi, from let's say January of 2023 to 19 today, had been having discussions with Mr. Temple 20 about the transaction? 21 A. I dont' know if it started in January of 22 2023. I know there's been times when he has 23 reported he has discussed the transaction. Once it 24 made public, there were times he discussed it with 25 him and he was running for the office of 19 1 Commissioner of Insurance. Yes, he did report that. 2 Q. How many discussions do you think he had 3 with Mr. Temple? 4 MR. O'BRIEN: 5 Objection. Calls for speculation. 6 Go ahead and answer. 7 THE WITNESS: 8 I can remember him talking about 9 maybe three or so. 10 BY MR. KINNEY: 11 Q. Yeah, he used the term a handful. Does 12 that sound like a good -- 13 A. That sounds reasonable, yeah. 14 Q. And would Dr. Udvarhelyi report back to 15 the board after he had these discussions with Mr. 16 Temple? 17 A. So we have regular meetings. I think we 18 have nine regular meetings a year, and we've had 19 some update meetings at times. He would always 20 report on all those activities, including if he had 21 any discussions with Mr. Temple. 22 Q. You ever met Vanessa Claiborne? 23 A. Who? 24 Q. Vanessa Claiborne. 25 A. Not that I recall. 20 1 Q. The board didn't meet with Chaff & 2 Associates? 3 A. We did have a presentation with Chaff & 4 Associates. I don't remember the names of all the 5 representatives. 6 Q. It's my understanding that the board has 7 been kept aware of the vote tallies up until this 8 date. Okay. Can you tell me how many proxies, a 9 percentage of proxies, have voted or given the board 10 proxy and how many have declined to give the board a 11 proxy? 12 A. I don't know. I don't know those figures. 13 Q. Has the board been made aware of the 14 proxy returns? 15 A. They could have. We had an update call 16 yesterday that I was late getting on, so I did not 17 hear those specific numbers and where they are. 18 Q. So the board was -- you believe the board 19 was made aware of the current vote? 20 MR. O'BRIEN: 21 Objection. Calls for speculation. 22 Go ahead and answer. 23 THE WITNESS: 24 That could have happened before I 25 joined the call, yes. 21 1 BY MR. KINNEY: 2 Q. Is it passing or not? 3 A. I understand it's close. 4 Q. Is it passing or not? 5 A. Well, first of all, there's been no vote. 6 It's just proxies. Secondly, I understand that if 7 these were the only proxies we got and nobody 8 changed them, we would probably lose. 9 Q. Probably lose is what you said? 10 A. Yes. But it's close. 11 Q. When you say close, 5, 10, 15, 20? 12 A. I don't know. I took it to be a couple 13 percentage points. How much money has Blue Cross 14 spent on soliciting advertising of proxies? 15 A. I don't know that figure. 16 Q. Who did Blue Cross hire to do their 17 advertising? 18 A. Cindy Wakefield is our head of marketing. 19 So she has some firms out there. I can't remember 20 the names of those firms. There's been some others. 21 Other firms that have been hired to help out. All 22 the specific names, I don't know. The one name I do 23 know is a firm called Public Policy. 24 Q. Has Blue Cross engaged any advertising 25 firms to solicit favor with particular members of 22 1 industry or government officials? 2 A. I don't understand your question. 3 Rephrase that or -- 4 Q. We'll skip that. 5 Okay. Who is the lobbyist that Blue 6 Cross has engaged to assist them in getting this 7 plan of demutualization approved? 8 A. So historically we've used Rodney Braxton 9 at Southern Strategies. I can't remember the name 10 of another specific lobbying firm that we use. 11 Q. Is public policy an advocacy group, an 12 advertising agency? Why were they hired? 13 A. I think to do digital advertising, 14 digital ads. 15 Q. Do they have a particular area of 16 expertise? 17 A. I guess the digital space. 18 Q. Do you know -- has the board approved a 19 specific amount of money to be spent on advertising 20 to solicit proxy votes? 21 A. I don't remember a specific budget or 22 anything like that. We could have, but I don't 23 recall. 24 Q. If I said to you that a million dollars 25 has been spent by Blue Cross to solicit proxy votes, 23 1 would you think that there'd be an accurate number, 2 a high, a low, or -- 3 MR. O'BRIEN: 4 Objection. Calls for speculation. 5 THE WITNESS: 6 I wouldn't know. 7 BY MR. KINNEY: 8 Q. How much money has Blue Cross spent on 9 the Accelerate -- ALI? 10 A. The last number that I saw was in the 11 range of $2 million. 12 Q. And if this plan is not approved by the 13 members, that $2 million is in the garbage can, 14 correct? 15 A. I don't know where that garbage can will 16 be. 17 Q. If this plan is not approved, have you 18 wasted $2 million of the members money? 19 A. No, we have not wasted the members money. 20 Q. What do the members have for that $2 21 million? 22 A. I don't know. 23 Q. If a million dollars has been spent on 24 improving this spending ads and this thing fails, 25 what are the members going to have as a result of 24 1 that? 2 A. They'll have a much better understanding 3 of the challenges of being a single-state Blue Cross 4 Blue Shield licensee. They'll have a much better 5 understanding of strategic options that a company 6 like ours needs to constantly be looking at. 7 They'll have a much better understanding of the 8 feelings for providers and doctors in our community 9 and all those things that I think could be very 10 beneficial for us going forward. 11 Q. If you excuse me, I'm going to do this in 12 under 60 seconds. I just have to send a text if you 13 don't mind. I ask for your apology. 14 A. That's kind of bizarre. 15 Q. I ask for your forgiveness. 16 How much in total dollars has been spent 17 on this plan of reorganization, including ALI? 18 A. I don't recall the exact number. I think 19 it's in the neighborhood of $20 million. 20 Q. For lawyers and consultants and such? 21 A. Yes. 22 Q. That includes the two million for ALI? 23 A. I believe so, yes. 24 Q. So if the plan fails, do you know what 25 have for their $20 million? 25 1 A. Again, I'll repeat myself. I think we've 2 been very diligent at looking at the strategic 3 options for this company, the headwinds this company 4 faces, and what we need to do to survive and thrive 5 as a single-state Blue Cross Blue Shield licensee, 6 which will be very challenging. 7 Q. What are the intermediate benefits to the 8 policyholders and members if this plan passes? 9 A. Could you explain what you mean by 10 intermediate? 11 Q. It's what the law says. It's a term that 12 I'm -- it's the best I can do. I wish I could give 13 you an idea. The law says that it -- the plan 14 should provide intermediate and long-term benefits 15 and best interest for the policyholders and members. 16 So I'm, you know, if you could just tell me in your 17 own words, you know, what benefits you understand 18 this plan is going to bring to the members. 19 A. So I think there will be part of a much 20 bigger risk pool within Elevance Health, which will 21 be a risk reduction for our members and members in 22 the state. They will be -- I think in my mind 23 intermediate, certainly look at two to five years. 24 I think the integration will begin and in that time 25 period, they'll have much better access to specialty 26 1 care programs like chronic care disease programs and 2 specialty disease programs. They'll help 3 accelerate -- Elevance will help accelerate our 4 transformation from a digital platform, from a 5 customer service, customer experience standpoint, 6 also from a health care delivery standpoint. They 7 have much better platform access to what we call the 8 electronic health records that I think are vital to 9 state-of-the-art care than we currently have. 10 They'll be, I think, in a company that will offer 11 better scale and potentially better administrative 12 efficiencies. I think they'll have better 13 pharmaceutical solutions than we currently have and 14 we strive to have. But I think you'll see a lot of 15 those things in the intermediate that will give them 16 better access to all those things. I also believe 17 that in the intermediate they can very well be 18 cheaper than we would be as a stand-alone Blue Cross 19 Blue Shield licensee, and they have a much better 20 platform to mitigate the risk of some of the 21 multi-state antitrust litigation, what the outcomes 22 from that may be for our single-state Blue Cross 23 Blue Shield licensee, as well as the antitrust 24 litigation that's going on in other states in which 25 we're part of directly or indirectly, but we're part 27 1 of that. I think they offer a lot on the 2 intermediate side. They reduce a lot of our risk 3 and offer a lot of enhancements to care -- potential 4 enhancements to care, and even a better cost 5 platform to be more cost competitive going forward. 6 Q. And those are benefits that the members 7 of the policyholders will receive as being insured 8 with Elevance; is that correct? 9 A. I believe so, yes. 10 Q. Do you know of any other benefits that 11 the policyholders and members are going to receive 12 other than being part of Elevance? 13 A. Again, explain why that's different from 14 the question you just asked me. 15 Q. Well, I mean, it may not be. I don't 16 know the answer. It's not like I'm leading you into 17 a dead end. 18 A. Those are the benefits that I've taken 19 into consideration to get to this point. 20 Q. Did the board do due diligence on 21 Elevance? 22 A. Yes. 23 Q. Would you describe for me what the due 24 diligence was? 25 A. We had our consultants, our law firms, 28 1 and our senior management team prepare a lot of 2 materials about their position in the marketplace, 3 their reputation, their -- the things I specifically 4 focused on were the -- The Blue Cross Blue Shield of 5 Louisiana is very strong in service, so I wanted to 6 make sure that we weren't going to have a drop off 7 in service. Their MPS scores, or MTM scores, are 8 comparable to ours, even better than ours in some 9 cases. They looked at a myriad of operational 10 financial factors and reported out on those to us. 11 Q. Was the board made aware of the number of 12 fines and lawsuits and things that had been 13 accumulated against Elevance? 14 A. There was a general discussion about how 15 they do business and things like that, but my 16 recollection was that it was comparable to what we 17 see in the industry. 18 Q. Was the board aware that Elevance had 19 been assessed fines in excess of a billion dollars 20 since 2000? 21 MR. O'BRIEN: 22 Objection. Lack of foundation. 23 THE WITNESS: 24 I don't recall that we talked about 25 a billion dollars. 29 1 BY MR. KINNEY: 2 Q. Did you talk about any multi hundred 3 million dollars worth of fines. Maybe two hundred 4 twenty three million dollars worth of fines in one 5 year in California against Elevance. Were you 6 aware that. 7 A. I don't remember talking specifically 8 about that, no. 9 Q. Were you made aware of the fraud trial 10 that the United States Department of Justice has 11 brought against Elevance in the Southern District of 12 New York? 13 A. I remember being informed of some of 14 those type actions. I don't remember all the 15 specific issues, but I do recall talking about some 16 of those issues at a high level. 17 Q. And what was discussed about the fraud, 18 the U.S. Department of Justice fraud trial? 19 A. So just in general, the litigation and 20 claims were what you expect in our industry. 21 Q. Is a United States Department of Justice 22 accusation of fraud against a health insurer, is 23 that expected in the industry? 24 A. I think from a standpoint if you look at 25 the large insurers, there are a lot of claims 30 1 against them. 2 Q. Does it cause you any concern that 3 there's a pending United States Department of 4 Justice fraud trial against Elevance that's pending? 5 A. I think we're always concerned that we're 6 picking the right partner, yes. 7 Q. And what have you done to guard Blue 8 Cross Blue Shield of Louisiana against any outcome 9 from that lawsuit? 10 A. My comfort came in the leadership of 11 Elevance and the culture they've created and the 12 progress the business has been making under the 13 current leadership and the commitment of the board 14 to continue to improve the culture of that company. 15 Q. Did you ask what the exposure was of 16 Elevance out of that lawsuit? Did the board ask 17 that? Did you ask that? 18 A. I did not ask that. I can't recall the 19 entire discussion. Other board members could have. 20 Q. You do remember being made aware of this 21 particular lawsuit, correct? 22 A. I remember being talking about generally. 23 I don't remember the particular lawsuit as much as 24 generally the overall state of their business. 25 Q. You understand what the word exposure is 31 1 in lawsuit litigation, what's your exposure? 2 A. I do. 3 Q. Do you know what the exposure of Elevance 4 is in this fraud lawsuit that's brought by the 5 United States Department of Justice? 6 A. I do not. 7 Q. Shouldn't you know that? 8 A. I think this is an area where I've 9 depended on our consultants and our advisors and our 10 legal team to help us understand the overall risk. 11 Q. Have your consultants told you that 12 there's no substantial risk or exposure to Elevance 13 as a result of this lawsuit? 14 A. Not specifically, no. 15 Q. So you're advocating this plan of 16 reorganization knowing that there's a fraud lawsuit 17 by the Department of Justice and you don't know the 18 exposure to Elevance, so you're still advocating 19 that this plan go forward? 20 A. I am relying on our attorneys and 21 advisors who have done the due diligence on the 22 overall risk profile and Elevance and the overall 23 business and whether they're a good partner. 24 Q. What other companies besides Elevance did 25 Blue Cross discuss selling their business to? 32 1 A. So we had, the board was given 2 presentations by Highmark. 3 Q. Highmark? 4 A. Highmark, yes. 5 And early on, I believe there was one 6 more that came and gave us a presentation. I can't 7 remember which one that was. 8 Q. Highmark operates some other Blue Cross 9 franchises, correct? 10 A. They do, yes. 11 Q. Why didn't they get the call instead of 12 Elevance? Do you know? 13 A. My appreciation was they had a very 14 different model. We would basically give up the 15 control of our license to them, have to pay for the 16 integration. Very much more of a kind of a 17 decentralized type model. And there was no real 18 guarantees or confidence that we'd get the benefit 19 of the scale and the synergies that we were hoping 20 to get from a partner like that. 21 Q. What guarantees are you getting from 22 Elevance? 23 A. I think the fact that you're basically in 24 a bigger group that has a motivation to pull those 25 out, to get those synergies, to make sure that you 33 1 have the benefits of that from a business 2 standpoint, a practical business standpoint, gave me 3 a much better level of confidence. 4 Q. Excluding your level of confidence, what 5 guarantees have you gotten from Elevance? 6 A. None, other than the reps and warranties 7 that are in the agreement. 8 Q. Has Elevance guaranteed any rates for 9 current members? 10 A. Not that I know of. 11 Q. Has Elevance guaranteed any benefits for 12 members going forward? 13 A. Not that I know of. But neither has Blue 14 Cross Blue Shield of Louisiana. I'll add that. 15 Q. So nobody in the health insurance game or 16 field can guarantee anything past an insured's 17 policy year, correct? 18 A. Yes, I believe so. 19 Q. No guarantee for the future after an 20 insured's policy year expires, correct? 21 A. Generally so, yes. That's my 22 understanding. 23 Q. How much excess surplus does Blue Cross 24 Blue Shield of Louisiana have? 25 A. Generally speaking, I think our surplus 34 1 is about, I think it's approaching $2 billion, and 2 I believe under state law, that amount would be 3 considerably less, like maybe roughly a third of 4 that. And Blue Cross Blue Shield Association 5 requires a little bit higher than, maybe about 50 6 percent higher surplus than the state. So we're, 7 generally speaking, have about a, you know, maybe a 8 billion, two or three more than we're required by 9 law by the Blue Cross Blue Shield Association, if I 10 remember correctly. Something about that nature. 11 Q. So, in the transaction with Elevance -- 12 A. Yes. 13 Q. -- they're going to buy -- they're going 14 to pay two and a half billion dollars, correct? 15 A. Right. 16 Q. And they're going to give that to you as 17 the, you being ALI, correct? 18 A. Some of that will go to -- I don't know 19 all the mechanics of it. But generally speaking, 20 ALI will get what doesn't go to the policyholders. 21 A. Yes. 22 Q. Okay. Well, let's see if we can retrace 23 this a second. Okay? And I'm giving you my 24 understanding, and if you believe it's incorrect, 25 please correct me. 35 1 A. Yes. 2 Q. My understanding is Elevance is going to 3 get paid you $2.5 billion. You ALI, they're going 4 to write you a check for $2.5 billion. Does that 5 sound right? 6 MR. O'BRIEN: 7 Objection. 8 THE WITNESS: 9 At the closing, ALI will get to like 10 $2.4 billion, estimated in that range, yes. 11 BY MR. KINNEY: 12 Q. Why won't it be the 2.5 that's the amount 13 of the note? 14 A. Well, I think at the closing that amount 15 has to be, you know, the final balance sheet has to 16 be settled. But it would be roughly two and a half, 17 2.4, 2.5 billion dollars. 18 Q. 2.5 billion goes from Elevance to ALI, 19 right? 20 MR. O'BRIEN: 21 Objection. 22 THE WITNESS: 23 Again, I don't know the mechanics of 24 it. At the closing, that's what ALI's 25 projected to get. 36 1 BY MR. KINNEY: 2 Q. And then they're going to get -- I'm 3 sorry, they are going to get Blue Cross's legally 4 mandated reserves that are required by the Louisiana 5 Department of Insurance. Elevance will get that, 6 right? 7 A. It will stay in -- those reserves will 8 stay, you know, with what will become Anthem Blue 9 Cross Blue Shield of Louisiana, yes. 10 Q. And that's about $600 million? 11 A. I believe that's kind of what I recall, 12 but I can't remember my kids' names, much less exact 13 numbers. 14 Q. If Elevance decided to shut down the day 15 after this transaction took place, they would own 16 those statutory reserves, wouldn't they? 17 MR. O'BRIEN: 18 Objection. Calls for a legal 19 conclusion. 20 THE WITNESS: 21 I guess so. I don't know. 22 BY MR. KINNEY: 23 Q. So they would own the reserves -- 24 A. They would own the company they would own 25 the reserves. 37 1 Q. Going back to the divvy up. So we get 2 2.5 more or less to access ALI, and there's another 3 1.2 billion in excess reserves? 4 A. Again, I don't know the exact numbers of 5 what the excess reserves are, but I know we have 6 reserves than -- the way I think of it is 7 percentages. So I think the state requires us to 8 have reserves that are valued at like 250 percent of 9 some amount. And Blue Cross Blue Shield, as I 10 recall, requires us to have 375 percent of that 11 amount. And again, these are my recollections, the 12 exact numbers, and I think our reserves are about 13 960 percent of that amount. So whatever the -- and 14 we have a total of 200 -- close to 2 million in 15 reserves, so we could start doing the math. 16 MR. O'BRIEN: 17 A million or a billion? 18 THE WITNESS: 19 A billion. 2 billion, that's right, 20 2 billion, yeah. 21 BY MR. KINNEY: 22 Q. Just for our discussion purposes, and if 23 it bothers you if I use these numbers for 24 assumptions, let me know. But if we have two 25 billion in reserves, I thought we agreed that about 38 1 600 million was what was required by the state of 2 Louisiana. Is that fair to use that number? 3 A. That's probably in the ballpark. 4 Q. Okay. So that would give us about a 5 billion four left over? 6 A. Again, I don't know. I can't recall all 7 the details, but I believe we have to leave the 8 amount that the Blue Cross Blue Shield Association 9 requires as reserves, which would be higher than 10 what the state requires. 11 Q. Okay. So do you believe that the cash 12 that's going to be left over from reserves is about 13 a billion two? 14 A. I don't know that answer. 15 Q. Do you know that part of that is supposed 16 to go to ALI and part of that is supposed to go to 17 the members? 18 A. Part of that is supposed to go to ALI. 19 I'm not sure how the members get their money. 20 Again, the mechanics, which I probably knew at one 21 time, a year ago, I don't recall all the mechanics 22 of how everything closed. But I do recall that ALI 23 is supposed to get the neighborhood of $600 to $700, 24 which reflects -- are held in reserves, and about 25 $2.4, $2.5 billion at the closing, depending on what 39 1 the final values are. 2 Q. What is your expectation of the amount of 3 cash that ALI will get as a result if this 4 transaction was approved? 5 A. So we'll get about 2.4, 2.5 billion of 6 cash and about 600 to 700 million that are currently 7 securities that are held in reserve that would be 8 transferred to ALI. Not necessarily in cash, but 9 being transferred in securities. 10 Q. Okay. So the total value would be 11 between $3.1 and $3.2 billion? 12 A. Yes. 13 Q. How will that money directly benefit the 14 members of Blue Cross Blue Shield of Louisiana? And 15 I want to emphasize the word directly. 16 A. So in focusing on one of the primary 17 areas of focus will be chronic disease, specifically 18 diabetes, maternal and infant health, and mental 19 health, I would anticipate that there would be 20 programs, initiatives, projects that Blue Cross Blue 21 Shield of Louisiana members could actively 22 participate and would help address those conditions 23 and reduce health care costs, which would reduce 24 rates. So on the direct benefits, I believe that 25 there will be direct benefits. 40 1 Q. Can you tell me what -- give me one 2 direct benefit to a member of Blue Cross in the 3 operation of ALI and the utilization of the funds 4 from Blue Cross? 5 A. I just did. 6 Q. You didn't give me any direct benefits to 7 a member. You gave me benefits to the state of 8 Louisiana. So what I'm -- maybe I didn't -- you 9 didn't understand my question. So I'll rephrase it 10 and we'll do it again. 11 The 92 to 94,000 members of Blue Cross 12 Blue Shield of Louisiana. Can we agree on that? 13 MR. O'BRIEN: 14 Objection. 15 THE WITNESS: 16 Yes. 17 BY MR. KINNEY: 18 Q. Okay. And you're going to have 3.1 to 3.2 19 billion dollars? 20 A. Yes. 21 Q. And you're going to use that 3.1 to 3.2 22 billion dollars to do stuff, right? 23 A. Yes. 24 Q. Tell me what direct benefit is going to 25 be limited to the 92,000 members of Blue Cross Blue 41 1 Shield of Louisiana? 2 A. I don't think any of them will be limited 3 to the Blue Cross Blue Shield members of Louisiana. 4 Q. You mean you don't believe there will be 5 any direct benefit that is just limited to the 6 members of Blue Cross Blue Shield of Louisiana? Is 7 that accurate? 8 MR. O'BRIEN: 9 Objection. Go ahead and answer. 10 THE WITNESS: 11 Your question, your original 12 question, will there be direct benefits to 13 members? Yes, there will be. If a member of 14 Blue Cross Blue Shield participates in one of 15 our programs, initiatives, projects that will 16 help them if they have diabetes or are 17 pre-diabetic or helps them if they have mental 18 illness or if they have a maternal or infant 19 health issue, they will directly benefit from 20 our programs initiatives. 21 BY MR. KINNEY: 22 Q. Will the benefits that you're calling 23 direct benefits to the members, will other people 24 that are not members also receive those benefits? 25 A. I believe so, yes. 42 1 Q. So let me rephrase the question. Are 2 there any benefits that are going to come from you 3 running ALI that are exclusive to the members of 4 Blue Cross Blue Shield of Louisiana? 5 A. No, not that I anticipate. 6 Q. So not one single penny of your three 7 point one two million dollars will be exclusively 8 dedicated to the members the current members of Blue 9 Cross Blue Shield of Louisiana. Is that accurate? 10 MR. O'BRIEN: 11 Objection. Go ahead and answer. 12 THE WITNESS: 13 I believe so. 14 MR. KINNEY: 15 I'm going to take a break. We can 16 use this against our couple of minutes and Mr. 17 Bradford and I are going to go talk for a 18 second and then we're going to come back. 19 Okay. We won't be long. 20 (Recess taken.) 21 MR. O'BRIEN: 22 We're back on the record. 23 MR. KINNEY: 24 Turning over everything to Mr. 25 Bradford. 43 1 EXAMINATION 2 BY MR. BRADFORD: 3 Q. Mr. Barfield, we had talked about due 4 diligence. Did the company -- Blue Cross, or 5 whoever approached you, did they give you a 6 printout, a report, or a slide show about what was 7 either the due diligence that you all had? 8 A. So, let me just clarify your question. So 9 did the company provide us due diligence? 10 Q. Yes, Blue Cross or anybody give you some 11 type of written document or in a slide show type of 12 document that designated that this is our due 13 diligence. This is what we looked at, this is what 14 we've come up with. Can report to me. 15 Q. So the board was presented a number of, I 16 would say, comprehensive presentations on the 17 outcome of their analysis, due diligence, all those 18 things. 19 Q. When we say comprehensive, is it written 20 in some -- 21 A. It's a report that was presented to the 22 board. It was both a presentation and a lot of 23 dialogue, a lot of oral presentations and things of 24 that nature. 25 Q. And Elevance did present a proposal or a 44 1 report type deal or maybe not Elevance but somebody. 2 I think you said you relied on attorneys and experts 3 to give this information to you. 4 A. Yes. 5 Q. Okay. And can you tell me, do you 6 remember who the attorneys were or who the experts 7 were? 8 A. I can tell you the firms. I can't 9 remember all the names. 10 Q. Good?. 11 A. Our own counsel Lou Patalano, our own 12 legal department, including Corey Harvey. Morgan 13 Lewis was one of the primary firms doing this. 14 Q. Who's Morgan Lewis? 15 A. Morgan Lewis is the law firm. Don't know 16 where they're based, but they're a large national 17 law firm. McGlinchey, this firm, the offices we're 18 in, McGlinchey was part of the team early on. On 19 the law firm side, that's kind of my recollection. 20 There could have been others. 21 Q. And did this presentation got help you 22 make your decision and at least you on the board to 23 influence your vote? 24 A. So let me clarify there were 25 presentations. This was a very iterative process 45 1 over time. We get updates. We had many 2 presentations. But yes, all these materials, the 3 lawyers, consultants, and our executive team, senior 4 management team, put together were what I relied on. 5 A. Yes. 6 Q. Okay. Did you get a different type of 7 report that set out the pros and cons of this 8 particular sale to Elevance? 9 MR. O'BRIEN: 10 I'm going to object on attorney 11 client privilege. I'm not sure you've gotten 12 there, but I will instruct the witness. You 13 can't tell us what the attorney has told you. 14 MR. KINNEY: 15 Unless it was in confidence. If 16 there were a bunch of other people there. 17 MR. O'BRIEN: 18 Oh, wait, conference. I'm sorry, I 19 misunderstood the word. 20 THE WITNESS: 21 In your specific way of asking those 22 questions, I'm not sure if it in every 23 presentation every discussion the pros and 24 cons were discussed. 25 BY MR. BRADFORD: 46 1 Q. Were these in written form? 2 A. I think many of them were, yes. 3 Q. And have you looked at the articles of 4 incorporation for the board? 5 A. For the which board? 6 Q. For the Blue Cross Board. 7 A. I have, but it's been a long time. It's 8 probably been two years since I've looked at that. 9 Q. If I were to tell you that part of the 10 policy in the articles is that you are supposed to 11 be board and board members, are supposed to be, deal 12 openly, accurately, and fairly with the members. 13 A. Yes. 14 Q. Okay. Have you specifically given any of 15 the members a copy of what was said? 16 A. I have not. 17 Q. Do you know if the board has given a copy 18 of the document that was said? Because you 19 understand the board -- the members had to vote. 20 A. Yes. 21 Q. Okay. And just like you had to vote. 22 A. Yes. 23 Q. And you used this in order to make a 24 determination, right? 25 A. Correct. 47 1 Q. Would you think a member who might be 2 keenly interested in this would want to see this? 3 Some members would and some members won't. 4 A. Possibly. 5 Q. Did the board or anybody, any officer of 6 Blue Cross, offer the members to come in and look at 7 these documents? 8 A. I don't know. 9 Q. So if all we have is what's in this 10 proposal then what you're asking the members to do 11 is trust us and I'm not going to give you a chance 12 to verify. 13 Q. So may I ask what do you mean by the 14 proposal? 15 A. The proposal that they had a proposal 16 that was sent out, a booklet. They had questions 17 and answers in this booklet. 18 Q. Do you mean the management information 19 statement? 20 A. I guess it is what it's called the 21 management information statement. 22 A. Would you mind if I look at what you're 23 referring to? 24 Q. No, no, I don't mind. This is what I got 25 in the mail as a voting member. 48 1 A. Okay, so there's a letter that says 2 management information statement. That helps me. 3 I understand, again relying on our legal 4 team, that that management information statement has 5 the material information that we need to communicate 6 to our policyholders to make a decision. And I've 7 relied on that. 8 Q. All right. But if you relied on that, is 9 there any difference between your reliance and what 10 ... because you were asked to make a vote on this, 11 right? 12 A. Right. 13 Q. But you had more than what's in this in 14 this management state. 15 A. Yes. 16 Q. If I wanted as a member if I wanted to 17 see more why would not be allowed to see that? 18 MR. O'BRIEN: 19 Objection. You can go ahead and 20 answer if you don't. 21 THE WITNESS: 22 I don't know. 23 BY MR. BRADFORD: 24 Q. If you're an owner of something, 25 sometimes you would like to, you would verify what 49 1 other people said before you would just jump in and 2 take their opinion. Sometimes, right? 3 A. Sometimes. 4 Q. And in this case, did you verify some of 5 the things that people told you? 6 A. Again, like people. 7 Q. I don't know who all came in and talked 8 to me about it. All I can do is assume they were 9 people. 10 A. So may I be more specific? 11 Q. Sure. 12 A. When you say people, do you mean our 13 lawyers, consultants, and other advisors on this 14 trip? 15 Q. I would say anybody who came in and 16 advised you. 17 MR. O'BRIEN." 18 Once again, before you answer, I 19 caution the witness not to go into what was 20 discussed with the attorneys. 21 THE WITNESS: 22 Please ask the question again? Let's 23 go back to the question. 24 BY MR. BRADFORD: 25 Q. Well, I'm trying to find out -- 50 1 A. I just need to know the question. 2 Q. Sure. The question is, would you expect 3 someone, maybe a business person, or a person like 4 me, a lawyer, might want to look at the information 5 in the background, the more details, to see if he 6 can feel like he can verify what you said. Or what 7 these people said, the board said, or the executive, 8 whoever wrote this plan said. 9 A. Perhaps, yes. 10 Q. And is there any reason that you know of 11 that we can't see all this information? 12 A. I would defer to our attorneys to answer 13 that question. 14 Q. Are there non-attorneys who actually 15 attend these board meetings? 16 A. A lot of our members are non-attorneys. 17 A lot of our members are on board. 18 Q. Do people who are not necessarily on the 19 board attend the board meetings? 20 A. They are members of management, our 21 executive and senior management team that attend the 22 board meetings. At times there are consultants, 23 lawyers, and others involved in the board meetings. 24 Q. As far as Accelerate, has any document 25 been drafted? You're talking about going from a 51 1 foundation to a trust. 2 A. Yes. 3 Q. Any document that's been drafted? 4 A. Again, any document? 5 Q. A document for legislation, proposed 6 legislation? 7 A. We have a draft of proposed legislation 8 that we've worked on, yes. 9 Q. Has anybody ever seen that other than 10 people who work? 11 A. A representative of the Attorney 12 General's office was given a copy of one of those 13 drafts. 14 Q. And that's not your lawyer? 15 A. That's not our lawyer, no. 16 Q. Is that something that if I asked for it, 17 would that be, you could give it to me so we could 18 see these things? 19 A. Again, I'd defer to our attorneys to 20 answer that question for you. 21 Q. Does Blue Cross have a conflicts 22 policy -- conflict of interest policy? 23 A. We do, yes. 24 Q. Is it separate and apart from what may be 25 in the Articles of Incorporation? 52 1 A. I believe so, yes. 2 Q. Do you have to sign that policy every 3 year? 4 A. Yes, we do. 5 Q. If you have a business, does your 6 business deal directly with Blue Cross on anything? 7 A. No, we don't. 8 Q. Okay. If somebody is in a business, and 9 they directly deal with Blue Cross, do they have to 10 disclose the potential conflict? 11 A. I think there's some specific rules in 12 our policy about that or when you have to disclose 13 but generally there's a you know there's a 14 guideline, yes. 15 Q. Who do you disclose this to? 16 A. The conflict? 17 Q. The conflict. Let's just say you do have 18 a conflict. Who would you be required to disclose 19 this? 20 A. The policy has a term in there. I can't 21 remember the term of the person you're supposed to 22 disclose that to. 23 Q. If he does have a conflict, can he vote 24 on the proposal that's before him? Or is he 25 supposed to recuse himself? 53 1 A. Again, I would defer to our legal team on 2 the specifics of that. There's different types of 3 conflicts and things like that. 4 Q. What about a financial conflict? 5 A. Again, I would defer to the legal thing. 6 There is a recusal type deal there, but I don't 7 remember the specifics yet. 8 Q. Do you ever remember anybody saying I got 9 a financial conflict and I'm recusing myself? 10 A. On this transaction matter? Yes, I do. I 11 do remember all of this. 12 Q. Okay. And they did recuse themselves and 13 didn't vote? 14 A. Yes. 15 Q. And that was consistent with what you 16 remember of your policy? 17 A. Yes. 18 Q. You mentioned a company, and I'm not 19 familiar with them. Do you know about on the votes? 20 Who was going out to vote? You know, who was I guess 21 collecting the proxies? 22 A. Proxy solicitator? 23 Q. Yes, proxy solicitator. 24 A. I can't remember the name. I think it 25 was McKenzie something. 54 1 Q. I thought you said public -- public -- 2 maybe not. 3 A. No, I didn't. I didn't say anything 4 about the proxy stuff. This was the first question 5 you've given me on proxy stuff. 6 Q. Okay. I'm looking at these articles of 7 incorporation that look like 2019 and I noticed they 8 had a vote and the vote was 85,739 voting members in 9 favor and zero voting members against. I think 10 that's notice of the meeting. When you have a 11 meeting like this, do you know if all members, 12 voting members, get notice of the meeting? 13 MR. O'BRIEN: 14 Objection. 15 THE WITNESS: 16 Again, like what are you talking 17 about? 2019? 18 BY MR. BRADFORD: 19 Q. About your articles in the corporation. 20 A. I have no recollection of this. It may 21 have happened, but I just don't. That's 2019. It 22 was early in my involvement with the board, and I 23 just -- that seems like a lifetime ago right now. 24 Q. Well, it is a long time. I agree with 25 you. But it's kind of unusual I see 85,000 to 55 1 nothing. I mean, either people -- and I'm wondering 2 to get that that deal is it if they send out a 3 notice and you don't respond, it's a favorable vote? 4 A. I don't know. 5 Q. Have y'all received any type of 6 information back from McKenzie? The person who's 7 receiving the voting, the ballots. 8 A. So the proxies? 9 Q. Yes. 10 A. Okay. I do believe Blue Cross does 11 receive that information. I have not received that 12 personally. 13 Q. So this isn't like a secret ballots like 14 when we do voting with political elections that you 15 send in, seal it, goes off to the Secretary of 16 State. And y'all don't -- and the Secretary of 17 State does not -- does not submit the, what I call 18 absentee ballots, or early voting ballots, so that 19 the public can see them. Is that similar to what 20 you all are doing? 21 MR. O'BRIEN: 22 Objection. 23 THE WITNESS: 24 We are doing it the way that any 25 proxy process is done by any company, as I 56 1 understand. 2 BY MR. BRADFORD: 3 Q. And where did you get that understanding 4 from? 5 A. Administration, the Blue Cross Blue 6 Shield management team explaining how this was done. 7 It's being done. 8 Q. Was it in a board of directors meeting? 9 Was it a written statement that you all got? 10 A. I believe there's a question of that in 11 one of our meetings. I don't know if it's a formal 12 board meeting or update maybe. 13 Q. Do y'all keep written minutes of your 14 meetins? 15 A. We certainly keep minutes of our formal 16 board meetings, but not of all of our discussions. 17 Q. So this could be at a formal meeting or 18 it may not? 19 A. I can't recall. 20 Q. Are you familiar with Elevance itself? 21 A. Generally familiar. 22 Q. Do you know that they have subsidiaries 23 like AIM Health or something? 24 A. I do. 25 Q. Do you know the actual name of it? Or do 57 1 you just call it AIM? 2 A. I just heard the name AIM. 3 Q. AIM? 4 A. Yes. 5 Q. But if you hear the name AIM, you know 6 what your people are talking about in connection 7 with Blue Cross? 8 A. General, yes. 9 Q. Do you know there are a subsidiary of 10 Elevance? 11 A. I'm aware of that, yes. 12 Q. Do you know what they actually do for 13 Blue Cross? 14 A. I do at least know some of them. One 15 thing they do. 16 Q. Generally, tell me what you think they 17 do. 18 A. They help us review approvals for certain 19 types of procedures and requests of that nature. 20 Q. Is there anything else -- let me ask you, 21 how long have they done this? Is this just since 22 you've been talking to them, or have they done this 23 before you were talking to them? 24 A. I understand we've been doing this to 25 them before we started talking to them about the 58 1 transaction, but I don't know the exact time frame. 2 Q. Have you ever had any complaints about 3 the way AIM does its job? 4 A. No, I have not. 5 Q. Any lawsuits that you know of? 6 A. One lawsuit that I know of. 7 Q. Do you remember that? 8 A. Generally speaking it had to do with a 9 prostate-related procedure. 10 Q. Are there any other Elevance subsidiaries 11 that do work for Blue Cross? 12 A. I believe so. 13 Q. Is this contracted, like contract out 14 work? 15 A. That's how I understand it. 16 Q. And do you have any idea of exactly what 17 they're doing for Blue Cross? 18 A. Probably did at one time, but I have no 19 recollection. 20 Q. Do you know whehter or not there are 21 people working at blue cross right now that actually 22 work with your IT department to integrate different 23 programs? 24 A. I know we have a big IT department. I 25 don't know what they do. 59 1 Q. Do you know if AIM is, I mean AIM or some 2 subsidiary of Elevance working there now? 3 A. Again, not specific. With the IT 4 department. 5 Q. Now, Elevance has a bunch of different 6 programs; is that correct? That you know of? 7 A. Programs like you're talking about? IT 8 programs? 9 Q. I don't mean AIM. I mean Elevance. 10 There's a number of different programs that they've 11 talked to Blue Cross about and saying this is what 12 we'll be able to provide you with. 13 A. Again, when you say programs, what types 14 of programs are you referring to? 15 Q. Well, I think they, I think Dr. Steve 16 would, I don't know exactly, I don't remember 17 exactly everything, but I was just wondering if 18 they're out there, that you're contracting those 19 services instead of your Blue Cross people doing it 20 themselves. 21 A. Again, I believe we are contracting with 22 other parts of, other groups or other subsidiaries 23 within Elevance, not just AIM, but I couldn't tell 24 you what. 25 Q. Okay, that are Elevance subsidiaries, you 60 1 think? 2 A. Yes, I'm sorry, Elevance subsidiaries. 3 Q. Are there any other things that you 4 contract out that are with other people that are not 5 Elevance, that you all use, that Blue Cross uses, 6 you know, on a daily basis? 7 A. Yes, I understand there are many things 8 we contract out, yes. 9 Q. In this proposal that Elevance made to 10 you, was there any suggestion that, hey, we've got 11 these other proposals that we're going to do now or 12 we'll do in the future to help save other Blue 13 Crosses that they own, but offer them to you on a 14 contract basis? 15 A. Again, I'm having trouble following the 16 question. Could you be a little more specific? 17 Q. I can't be because I asked for questions 18 about contracts that y'all had contracted out and 19 your lawyers have objected to it. I don't know what 20 you do. I just know people do contract out 21 different things. I'm just trying to find out who 22 you contract out with, what they do for you. 23 A. Other than Elevance, you're talking 24 about? 25 Q. I wanted to know other than AIM. I do 61 1 know AIM because I saw AIM in a lawsuit. But I'm 2 not sure what else is happening. Again, I don't 3 have specific recollection. Again, we talk a lot 4 about operations in every board meeting and things 5 like that. I just don't have a specific memory of 6 all those details. 7 Q. Okay. Do you use somebody from Elevance, 8 who is a subsidiary of Elevance, like Wellpoint, 9 that deals with pharmacies, pharmacy prescription 10 things that you know of? 11 A. So I believe we use a -- what do you call 12 it, a pharmacy benefit manager that is not 13 affiliated with Elevance. It's an outside firm we 14 contract with. It's not affiliated with Elevance. 15 Q. I'm asking -- that's fine. 16 When you got the due diligence report, 17 was there anything in that due diligence report that 18 was, I guess, bold lettered, confidential, don't 19 tell anybody about this? 20 MR. O'BRIEN: 21 I'm going to object because I'm 22 going to remind the witness anything that came 23 from the attorneys. It's a 24 client-attorney-client privilege not to 25 discuss. 62 1 THE WITNESS: 2 I don't recall. 3 BY MR. BRADFORD: 4 Q. Have you talked to other people? Have 5 you talked to them about some of the projects they 6 might use that you could use if you become a 7 corporation that Elevance has or will be producing? 8 A. We have talked about the care management 9 type programs that could be a benefit to us, and we 10 have talked about the advantages of having a PBM 11 that you could better integrate with your other 12 parts of your services to your policyholders. When 13 you talk about care management, I remember reading 14 that LVANS can do mental health, diabetes, cancer, 15 maternal issues for Blue Cross. If they buy this, 16 then they'll be Blue Cross of the, Anthem Blue Cross 17 of Louisiana. That they could incorporate that into 18 Blue Cross, I guess. 19 Do you know whether or not you would use 20 some of those types of services? 21 A. Me personally? 22 Q. No, Accelerate. 23 A. I don't believe so. We'll have a whole 24 different mission. 25 Q. What mission will Accelerate -- 63 1 A. Have the same mission I'll correct myself 2 but we'll fulfill it very differently. We're not 3 going to be an insurance company. We're not going 4 to be competing with insurance companies that sort 5 of thing. 6 Q. And so Elevance is going to be an 7 insurance company? 8 A. Yes. 9 Q. Same way as blue is Blue Cross right 10 now. 11 Do you know if they want to use people to 12 actually like telemedicine where they call up and 13 speak to a nurse or somebody, they get into a 14 computer, and the computer tells hem what to what 15 treatment they ought to receive? 16 A. I know that they have better telehealth 17 capabilities than we currently have. I don't know 18 how specifically that works out. 19 Q. Did they ever tell you, as a director, 20 how many people actually use their telehealth? 21 A. I don't remember hearing that. 22 Q. Have They given you specifics about any 23 program they're currently using for health care. 24 A. For health care? 25 Q. Yeah, Elevance. Some specific, like here 64 1 is the proposal, or here is what we do in, say, 2 Wisconsin. This is what we do. 3 A. So, yes. 4 Q. And you've got that? You've seen the 5 program? So they gave us a presentation. Part of 6 that presentation, and I specifically remember, 7 talked about all their different products and 8 services and things like that, and they gave us an 9 overview of all those. And, you know, we were able 10 to ask questions and a lot of detailed discussion 11 about those and what they could bring to our 12 policyholders and our members. 13 Q. Do you know that Elevance has been in a 14 number of lawsuits involving lawsuits that has 15 occurred in hospitals and doctors leaving Elevance 16 and getting out of their network because of 17 Elevanc's delay in paying, underpaying, that sort of 18 issues? 19 A. I don't know the specific lawsuits. 20 Q. You don't know what they call the bond 21 secure lawsuit with the bond secure hospitals in 22 Virginia and Ohio? 23 A. I heard about that at the hearing on 24 Monday. 25 Q. Is that the first time you've heard about 65 1 it? 2 A. First time I remember hearing it, that 3 specifically. 4 Q. What about the case they just settled in 5 California where the hospital system was saying, 6 we're getting out of your network because of how 7 you're treating us? 8 A. First time I heard specifically about 9 that was at the meeting on Monday. 10 Q. Okay. Well, if that happens and people 11 actually do leave the network because of customer 12 service by Elevance, that's going to be very 13 detrimental to the people who are patients of those 14 hospitals and the doctors who work for those 15 hospitals, right? 16 MR. O'BRIEN: 17 Objection. Calls for speculation. 18 THE WITNESS: 19 Could be. 20 BY MR. BRADFORD: 21 Q. Something that that you would look at 22 whether this is a practice by Elevance and the way 23 they bargain with hospitals and doctors in an area? 24 MR. O'BRIEN: 25 Objection. Calls for speculation. 66 1 THE WITNESS: 2 I'll answer the question this way. 3 We have negotiations with doctors and 4 providers that get very, very tenuous and very 5 close to the line sometimes. So I don't think 6 that's unreasonable in our business to have 7 those things. 8 MR. O'BRIEN: 9 Mr. Bradford, I do ask you to wrap 10 it up because we are past the 90-minute time 11 frame. 12 MR. BRADFORD: 13 I didn't agree with it, but if 14 you're going to end the deposition, you're 15 welcome to do that. 16 MR. O'BRIEN: 17 Thank you for your time, sir. 18 19 20 21 22 23 24 25