A bill that would spell out a nonprofit, public service mission for CareFirst BlueCross BlueShield and set up an oversight committee to monitor the state's largest health insurer is expected to be introduced today in the Maryland House of Delegates.
As written, the bill also would end the terms of 11 of CareFirst's 21 board members by the end of September, but drafters of the bill said the provisions that would change the board are likely to be amended.
Del. Shane E. Pendergrass, primary sponsor of the bill, and Del. John Adams Hurson, chairman of the House Health and Government Operations Committee, who worked on developing it, both described it as "a work in progress."
"We wanted to get it in now," said Pendergrass, a Howard County Democrat. "It's already very late."
While the bill can be refined, she said, it was important to get something introduced and hold hearings to get public input. A hearing is likely next week, she said.
Insurance Commissioner Steven B. Larsen last week rejected a bid by CareFirst to convert to for-profit operation and sell the company. In a legislative briefing Monday, Larsen said he had "very little confidence in the board" after it had allowed the company to behave more like a for-profit business and had approved huge bonuses for executives.
Lawmakers, most of whom opposed the sale and conversion, quickly said they would seek to return CareFirst to its nonprofit mission. In response, David M. Funk, a lawyer for CareFirst, said Chief Executive Officer William L. Jews was "interested in reconciliation at this point."
In addition to the House bill, Pendergrass said, a similar bill was being developed in the Senate, but would likely be introduced later.
The House bill, as drafted, would create a 15-member oversight board, which would include two members each from the House and Senate and representatives from a large employer, a small employer, the state medical society and the Maryland Hospital Association. CareFirst would report at least quarterly to the committee, which in turn would report to the legislature each year.
The bill spells out a number of goals the committee would monitor, including pricing and underwriting policies designed to make insurance "affordable and accessible." The bill also says that CareFirst would be "committed to a nonprofit corporate structure" and that it would "contribute to the improvement of the overall health status of Maryland residents."
Pendergrass said the chairmen of the oversight committee would become ex officio members of the CareFirst board of directors, and would be able to attend its meetings.
The bill is also designed, Pendergrass said, to "turn over enough seats in a short enough amount of time" to change the board. The draft also calls for the board size to be reduced to 15 from 21. However, the board would continue to recruit its own members; the legislature would not seek to name any.
"The concept is, rather than having a prescription of who's on the board, to have a strong oversight committee," said Hurson, a Montgomery County Democrat.
He said the provisions about board size and terms might have to be altered or dropped because the board's structure is shaped by orders issued by insurance regulators in Delaware and the District of Columbia, as well as Maryland. CareFirst is a holding company that operates Blue Cross plans in all those jurisdictions. Its board is made up of 12 members from Maryland, six from the District of Columbia and three from Delaware.
Jeffery W. Valentine, a CareFirst spokesman, said, "We haven't yet seen the bill, so we haven't had a chance to analyze it."
W. Minor Carter, a lobbyist for Maryland Cares!, a coalition that opposed the conversion and sale, said he was working on amendments to the bill, but couldn't yet describe them.Copyright © 2015, CT Now