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City looks to intervene in KPS sale

The City of Bremerton, Kitsap County Medical Society and three physicians have filed motion asking Thurston County Superior Court to let them intervene in the sale of KPS Health Plans to Group Health. The group is asking for a 90-day continuance so that all parties can further investigate the reasons behind the sale, Group Health’s intentions for operating KPS and the recent decision from the state insurance commissioner to reject a plan by the Bremerton community.

KPS was placed into receivership in August of 1999 after it accrued about $8 million in debt. Has since been operating under a rehabilitation plan set for by the insurance commissioner’s office.

In April the Office of the Insurance Commissioner (OIC) announced it was selling KPS, which inures about 55,000 subscribers, to Group Health.

According to the court documents, the City and other parties believe the rehabilitation plan is successful.

“The OIC’s announcement of the proposed sale of KPS to Group Health raised many questions regarding the details of the proposed transaction, as well as many questions regarding the need for such as drastic move, particularly given the significant progress made by KPS over the course of the rehabilitation proceeding as reported by the receiver,” court documents state.

They also claim attempts to get documents that answer these questions have been refused because the OIC believes the City, Kitsap County Medical Society and physicians have no say in the case.

In July the City, KCMS and Kitsap County submitted a plan to Insurance Commissioner Mike Kreidler for KPS to continue as an independent, locally operated healthcare provider. The motion claims that plan was rejected in less than a day.

The OIC maintains that “Insufficient progress toward solvency has been made,” court documents state.

On July 15 the insurance commissioner approved the sale of KPS to Group Health for $19 million, a move that would bring KPS out of receivership.

The court will hear the details of the proposed sale in an Aug. 19.

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