Government seeks expedited dismissal of TakeCare lawsuit

MOTION: The Judiciary of Guam and the Department of Administration recently filed a joint expedited motion in the Guam District Court to dismiss TakeCare Insurance's motion for summary judgement. The ongoing local and federal lawsuit was filed by TakeCare over the awarding of the $108 million government of Guam group health insurance contract to Aetna International. Post file photo

TakeCare Insurance Co. filed two lawsuits Monday alleging a new Guam law favoring the Guam Regional Medical City violates the health insurer's constitutional rights.

After having withdrawn its lawsuit against the Judiciary of Guam and the government of Guam last week, TakeCare refiled one lawsuit in the Superior Court of Guam against the government of Guam, the Department of Administration and the Office of Public Accountability. It seeks to overturn the public auditor’s decision that TakeCare did not submit a timely protest with the Department of Administration.

The second lawsuit was filed in the District Court of Guam against Edward Birn, the director of the Department of Administration, and John Lizama, the administrator of the Superior Court. It seeks to declare Public Law 35-2 unconstitutional.

Both lawsuits cite the law which was passed by Guam lawmakers overwhelmingly in February by a vote of 13-0, and then signed by Gov. Lou Leon Guerrero.

The law requires insurers who want to provide health insurance to GovGuam employees to include Guam private hospitals in their networks. Guam has only one private hospital and that's Guam Regional Medical City.

District Court

The focus of the District Court lawsuit is on alleged violations of constitutional protections.

TakeCare says that Public Law 35-2 is “an unconstitutional delegation of executive, legislative and police power to a private entity in contravention of the Due Process Clause of the 14th Amendment and the separation of powers doctrine.”

Passage of the law allowed “GRMC to use the sovereign power of GovGuam to gain an advantage, economic or otherwise, over another private party,” states the lawsuit which also claims the law “is an improper delegation of power that allows a private entity, such as GRMC, to determine what entities may participate in and ultimately win a contract for the RFPs.”

TakeCare asks the federal court to block implementation of the local law and order GovGuam to reissue a request for proposals for the GovGuam health insurance contract.

Superior Court

The Superior Court lawsuit details what TakeCare says were its efforts to comply with the law and submit a plan that provided coverage at GRMC.

The lawsuit alleges GRMC “insisted that TakeCare pay rates that are higher than the ones it charges other health insurance carriers.”

TakeCare says it  “rejected GRMC’s demand” that it be included in “all of TakeCare’s federal and commercial” health insurance networks. 

The company says it also “rejected GRMC’s demands” that TakeCare not charge an additional fee for including GRMC.

The second lawsuit asks the Superior Court to reverse the OPA’s rejection of TakeCare’s protest and declare it “null and void.”  

Speaker’s reaction

Speaker Tina Muña Barnes, who introduced Bill 30-25 which became Public Law 35-2, issued a statement in reaction to the lawsuits.

“Contrary to what (Takecare President and CEO) Joe Husslein thinks, this was always about doing right by the hardworking men and women in the Government of Guam,” she said.

“The truth is that every customer has a legal right to determine the benefits they will pay for – even when that customer is GovGuam.” 

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