Judge says Hatch can’t oversee Medica’s board

08/18/2005

Neal Gendler,
Star Tribune
August 19, 2005


A four-year battle between Attorney General Mike Hatch and Medica ended Thursday when a Hennepin County judge Thursday stripped Hatch of continuing oversight of the health insurer.

In a written ruling, Judge Lloyd Zimmerman called it “unfortunate” that Medica board members were “unfairly accused” and that the historic government-private partnership in cleaning up financial abuses at Medica had descended into “overheated rhetoric and accusations of self-dealing, deception and hijacking.”

Hatch had alleged that he still retained control over Medica’s board, eight members of which he’d appointed in 2001 after the health insurer was split from heath-care provider Allina after financial irregularities, including excessive travel, entertainment and consulting fees, were uncovered during an investigation by Hatch’s office. He wanted those eight removed, claiming that they hadn’t followed state law in involving policy holders in running the insurer.

Medica argued that the board’s obligations to Hatch ended in 2002 with adoption of new corporate bylaws and official election of the board.

Zimmerman ruled that the state’s allegations “are unproven and without merit,” and that court supervision of Medica, and thus Hatch’s authority over the board, was ended.

He said: “The attorney general’s intervention in 2001 was government at its best—protecting the public from corruption, waste and abuse.” But the case “is about whether Medica’s board acted honorably or illegally in taking Medica from a national scandal in 2001 to the position of being named the No. 1 nonprofit health plan in the country. At the end of the day, good people were unfairly accused. After a fair and impartial trial, their good name is restored to them.”