The District's insurance commissioner last night ordered CareFirst Blue Cross Blue Shield and its District-based health insurance plan to disregard a new Maryland law that seeks to reform the not-for-profit, Maryland-based insurer.
The order raises the possibility that the District plan, known as Group Hospitalization and Medical Services Inc. (GHMSI), could break away from CareFirst, its parent company, Commissioner Lawrence H. Mirel said in an interview. But that is still far from certain, he added.
Mirel said he took action after GHMSI's board recently petitioned its parent company for the right to run its own affairs. The CareFirst board took no action on that request at a meeting with GHMSI officials this week, Mirel said.
CareFirst spokesman Jeff Valentine had no comment last night on the order or Mirel's comments.
Maryland House Speaker Michael E. Busch (D) called Mirel's action irresponsible and vowed to go to court to stop him, if necessary.
If the District can assert control over a Maryland-based company, Busch said in an interview, "I think we're going to put slots in D.C."
Mirel, who has ordered CareFirst executives to appear at a Nov. 21 hearing, said Maryland lawmakers do not have the authority to control GHMSI, which affiliated with Maryland's Blue Cross plan in 1997 to form CareFirst Inc.
The Maryland General Assembly passed the reform law this spring that seeks greater public oversight of CareFirst. The lawmakers acted after CareFirst's board sought to sell the company to a for-profit insurer and approved $119 million in bonuses and other benefits for top executives if the sale succeeded. Maryland's insurance commissioner did not approve the sale.
The new law gives Maryland the right to replace some CareFirst board members and to review salaries of the insurer's top executives, and it prohibits CareFirst from turning for-profit for at least five years.
Mirel said the provisions, which also apply to GHMSI, may not be in the best interest of D.C. residents. Delaware's insurance commissioner has raised similar concerns.
"The Maryland law requires that CareFirst with all of its affiliates be run for the benefit of Maryland residents," Mirel said. "Well, GHMSI is under a congressional statue that requires it to be run for the benefit of its policyholders, many of whom are federal employees. I can't allow that to happen." |
