NY State Court of Appeals rules in state's favor in Empire Blue

About three years after Empire Blue Cross transformed from a not- for-profit insurer to a public company, the New York State Court of Appeals has ruled that the state has the right to spend the money obtained from Empire's conversion to a public company as it sought.

New York State in 2002 approved Empire's bid to go public, with the caveat that the state could use the money for a wide range of health-care programs. But Consumers Union, the not-for-profit organization that publishes Consumer Reports, argued that the state was seizing funds improperly. Consumers' wanted the money to directly benefit the state's uninsured.

The Court of Appeals ruled the state acted properly in its effort to use the money to fund various programs under its Health Care Reform Act, or HCRA.

Estimates of the value of the money at stake - primarily from stock that has remained unsold since Empire went public Nov. 7, 2002 - range from $2 billion to $4 billion.

Kenneth E. Raske, president of the Greater New York Hospital Association, called the decision a resounding victory for the state of New York.

Chuck Bell, programs director for Consumers Union, said his organization is currently reviewing our legal options.

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