Blue Cross data subpoenaed by Senate panel Senators call for 10 years of Md. Blues' financial records.

July 08, 1992|By Patricia Meisol | Patricia Meisol,Staff Writer

A U.S. Senate subcommittee ordered Blue Cross and Blue Shield of Maryland yesterday to turn over nearly 10 years of data about its finances as part of a growing probe into some of the nation's largest and best-known health insurance plans.

In a far-reaching subpoena to the Maryland Blues, the Senate Permanent Subcommittee on Investigations asked for the financial records of 21 separate companies created by the insurer in the past decade, some of them without the state's knowledge.

Further, the panel is demanding what could be hundreds of boxes of documents regarding Blue Cross' cash flow, contracts, taxes, board meetings, loans, investments, actuarial data, claims files, correspondence with consumers and its entire payroll for the period.

The subpoena was due to be delivered yesterday, a committee source confirmed.

Blue Cross insures or administers health insurance for 47 percent of Marylanders and collects $1.4 billion a year in premiums. Yesterday, company executives said they looked forward to an opportunity to respond to questions and concerns raised by the committee, chaired by Sen. Sam Nunn, D-Ga.

"We welcome the fact that the Nunn committee has asked us to appear," said John Picciotto, Blue Cross' general counsel. "We intend to show them what we are about and to convince them we are a strong, healthy company and we are going in the right direction," he said, adding that collecting the documents could take "a long time."

The subpoena comes as Maryland regulators prepared to penalize Blue Cross as the result of a still-confidential but apparently highly critical study of the insurer's dealings with consumers and health-care providers.

In testimony to Congress last week, Maryland Insurance Commissioner John A. Donaho referred to some of the study's findings in charging that the Blues had shown a "wanton disregard" for its obligations to Maryland residents.

Among other things, he told the Senate panel that Blue Cross was late in paying more than 1 million claims to consumers over the past five years. The company then failed to pay interest on the late payments, as state law requires, he said.

Mr. Picciotto disputed the state's contention that Blue Cross failed to pay interest on late payments to policyholders. He said Blue Cross has interpreted the law covering late payments differently than have state officials.

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