Blue Cross records again under scrutiny

December 10, 1993|By John W. Frece | John W. Frece,Staff Writer

Investigators are headed back to Blue Cross and Blue Shield of Maryland to go over the company's dog-eared books once again.

After broader investigations by a U.S. Senate subcommittee, state insurance regulators, and legislative oversight committees over the last two years, state Insurance Commissioner Dwight K. Bartlett and a team of legislative auditors have been dispatched to figure out what went wrong with the Blue Cross-administered state health insurance program.

In addition, House Minority Leader Ellen R. Sauerbrey, R-Baltimore County, has called for a full-scale, joint legislative investigation of the program, which Budget Secretary Charles L. Benton Jr. contends is at least $60 million and potentially as much as $117 million in the hole.

Mr. Benton, who says he has been suspicious for nearly two years that he was not being given correct information about the costs of the program, also has advertised for a consultant to review the benefits the state offers and assess the state's contractual relationship with Blue Cross.

This is not the first time he has attempted such a review.

Between March 10 and April 10, 1992, Mr. Benton and state Personnel Secretary Hilda E. Ford exchanged at least 10 memos on a proposal by Mr. Benton and the governor's advisory Commission on Efficiency and Economy in Government (known as the Butta commission) to hire a consultant to review the health insurance program. A request for proposals was advertised, but a contract was never awarded.

"I did sense that something may not be proper here, primarily for the reason that it was difficult to get information," Mr. Benton now says. "You'd get the sense or the feeling that someone was not giving you all the information. That's the kind of feeling I had."

He said he also was uncomfortable with the rates the personnel department proposed, saying they appeared to be negotiated solely by Assistant Secretary Catherine K. Austin, who oversaw the program, and were always forwarded to the budget department so late that "it really precluded any fair analysis."

Ms. Austin has been unavailable for comment since mid-October.

Mr. Benton now claims the aborted study would have uncovered signs that the program was under-funded as early as 1991, and probably would have averted similar problems later. He accuses Ms. Ford and Ms. Austin of blocking the study because they did not want anyone to know the details of what they were doing.

Ms. Ford vehemently denies that.

She said her sole concern was that Mr. Benton wanted to pay for the $200,000 to $300,000 study with money set aside in federally supervised pre-tax accounts by employees to cover their medical bills or, failing that, with money earmarked for insurance premiums. Either way, she said, it was improper, but typical of what she claims is Mr. Benton's penchant for tapping into any funds available to accomplish his goals.

After the flurry of paperwork, weighty opinions by staff lawyers, and consultants' efforts to put together their bids, the issue was quietly dropped.

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