A New Orleans attorney is seeking to block the Blue Cross sale

(File photo)

New Orleans-based attorney Henry “Tut” Kinney has filed two lawsuits in an effort to effectively block the sale of Blue Cross and Blue Shield of Louisiana to Elevance Health.

The first lawsuit, filed in state court and currently in preliminary motions, is not against BCBS but the Accelerate Louisiana Initiative, the $3.1 billion public health foundation that would be created with the sale proceeds. BCBS’ approximately 95,000 policyholders stand to receive only a small fraction of the proceeds—about $3,000 per eligible policy—while BCBS members who are not policyholders stand to receive nothing. Kinney’s lawsuit argues that policyholders, not the foundation, are the ones who are entitled to the proceeds.

“The decision [to sell] was made by a highly compromised board of directors,” Kinney says. “Everyone on the board of directors who voted for this sale stands to reap enormous benefits. If I’m a member of the board of directors, I have a fiduciary obligation to the membership not to act out of my own self-interest.”

This is far from the only time the Accelerate Louisiana Initiative has come under fire. Notably, the Louisiana Budget Project has criticized the foundation’s status as a 501(c)(4)—a status that allows it to operate under very different rules than 501(c)(3) public charities.

“There would be little to stop Accelerate Louisiana from functioning as a powerful lobbying arm of the for-profit health insurance industry, endorsing and promoting political candidates who favor the industry’s positions which may not reflect the public interest,” the Louisiana Budget Project wrote in August.

The second lawsuit, filed in federal court, takes issue with the process of appeal. Judge Brian Jackson, a judge with the U.S. District Court for the Middle District of Louisiana, is expected to issue a ruling on the case within the next week.

“As it is now statutorily, the little guy has virtually no right of appeal because Blue Cross can demand a billion-dollar bond that none of us can make,” Kinney says. “We’ve attacked the constitutionality of that.”

According to Kinney, several other lawsuits are currently being considered in relation to a perceived breach of the fiduciary duties of BCBS board members.

“I want to make it clear that I have no clients and no financial interest whatsoever in this matter,” Kinney says. “I’m doing this because [the sale] is wrong on so many fronts.”

BCBS’ vice president of communications declined to comment on Kinney’s lawsuits, saying the insurer “does not comment on active litigation.”

The Louisiana State Medical Society continues to voice concerns about the potential for increased premiums, limited access to treatment options and reduced benefits under the current acquisition proposal. Earlier this month, executives from BCBS and Elevance met with Business Report staff to make their case for the transaction. Read about the meeting here.

On Monday, two Louisiana Senate committees are set to hold a hearing on the acquisition, which will also be the subject of a public hearing hosted by the Louisiana Department of Insurance on Feb. 14.