D.C. Blues president to retire in November

October 06, 1992|By Patricia Meisol | Patricia Meisol,Staff Writer

Under the spotlight of congressional investigators, the parent company of the Blue Cross and Blue Shield plan that serves the metropolitan Washington area has announced the retirement of its longtime president.

At the same time, the insurer agreed to pay up to $345,000 over the next year to a prominent Maryland lawyer, Peter O'Malley of Upper Marlboro, to help the company answer questions from congressional investigators about its finances.

Mr. O'Malley was also named chairman of the board of Group Hospitalization and Medical Services Inc., the parent company of Blue Cross and Blue Shield of the National Capital Area. He succeeds Dr. Charles Duvall, who will become chairman of the board's executive committee.

The D.C. Blues serves 1.1 million people, including 400,000 in Maryland, and reported revenues of $1.4 billion last year. It is the largest insurer of federal employees.

Last year it reported $74 million in losses, accumulated over the past eight years, from subsidiary businesses.

The company is the next to be examined by the Senate Permanent Subcommittee on Investigations, which is investigating waste and fraud in the insurance industry. No date has been set for the hearing, chaired by Sen. Sam Nunn, a Georgia Democrat.

Joseph P. Gamble, president and chief operating officer of GHMSI, who has been with the company 35 years, will retire Nov. 12, the board announced last week. Benjamin W. Giuliani, who now heads the Blue Cross-Blue Shield division of the company, the largest part of its business, will succeed him, according to Blues spokesman Raymond Freson.

Mr. Giuliani will be responsible for a host of internal changes in the company, Mr. Freson said.

Mr. O'Malley, hired at the request of Mr. Giuliani for about one year, will work as a "trouble-shooter and problem solver, particularly to handle relations with the Nunn committee," Mr. Freson said.

Mr. O'Malley has previously served on a number of public bodies in Maryland, including two stints as chairman of the board of the University of Maryland regents.

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