Association upbeat about Md. Blues

December 10, 1992|By Ann LoLordo | Ann LoLordo,Staff Writer

The National Association of Blue Cross and Blue Shield say it's "optimistic" that the Maryland Plan will continue to improve its financial condition under the company's new leadership.

The association, which licenses the Blues programs, attributed its optimism in Blue Cross and Blue Shield of Maryland to "a series of positive performance initiatives" put in place at the insurer in recent months, according to a statement.

The national Blues issued its assessment of the troubled plan's future earlier this week after the association's president met in Washington Monday with Frank A. Gunther, chairman of the Maryland Blues, and William A. Beasman Jr., interim chief executive.

The two men wanted to brief the national group on steps the company has taken to improve the financial health of the troubled plan.

"To my mind, it was a very good meeting," Mr. Beasman said. "I felt relieved they were with us."

Clay Mickel, a spokesman for the national group, declined to elaborate on the statement, except to say: "What we heard and what we saw in that meeting makes us optimistic that recent trends in Maryland are going to continue and there is going to be an improvement there."

The Maryland insurer faces a Dec. 31 deadline to meet the first of three year-end performance goals imposed in April by the national group. If the plan fails to meet the goals for cash flow, reserves and service, it risks losing its license to operate as a Blues plan.

Mr. Gunther met with national Blues President Bernard Tresnowski to try to convince him that the Blues expect to meet the two financial goals.

Mr. Beasman said the national association offered to help the Maryland plan "all we can if you need it," particularly with the company's service delivery problems.

But, he said, the association said that "1993 is the year we'll be watching you very closely."

In another development, the Maryland Blues announced yesterday its second reorganization of top management in three weeks.

Since Friday's resignation of company President Carl J. Sardegna, the Blues board has issued the findings of a nine-week internal review of the company and named Mr. Beasman, a former board member and retired bank president, as interim chief executive officer.

Mr. Beasman promoted three executives yesterday to senior vice presidents: John A. Picciotto, the company's legal counsel; James R. Swenson, chief financial officer; and Thomas J. Higgins, who will oversee human resources and other internal staff operations.

In late November, Mr. Sardegna asked three top executives to leave and a fourth to accept reassignment to other duties. The shake-up came two months after a congressional investigation found widespread mismanagement at the Blues. Stephen E. Bailey, a senior vice president who was transferred during that reorganization round, resigned yesterday.

Mr. Gunther said a five-member committee of the board, headed by Richard E. Hug, chairman of Environmental Elements Corp., would head the search for a chief executive officer.

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