Young's ties to health-care firms stir questions

March 12, 1995|By Thomas W. Waldron and William F. Zorzi Jr. | Thomas W. Waldron and William F. Zorzi Jr.,Sun Staff Writers

State Sen. Larry Young chairs a powerful subcommittee that molds legislation worth millions of dollars to hospitals, health insurers and nursing homes.

Yet at the same time, Mr. Young has significant financial ties to those interests that pose potential ethical conflicts. For example:

* He is a top aide to the owner of one of the largest private ambulance companies in the state. In that capacity, Mr. Young routinely solicits business from the same health-care enterprises whose fortunes he helps to decide in Annapolis.

This year, he helped his company, American Ambulance and Oxygen Service Co., nail down a potentially lucrative contract with Blue Cross and Blue Shield of Maryland, which would be affected significantly by bills pending in Mr. Young's subcommittee, a new health-care subcommittee of the Senate Finance Committee.

In another case, Mr. Young helped his company gain ambulance business with Maryland General Hospital while he was pushing a bond bill for the hospital.

* Mr. Young owes $55,000 to three people in the nursing home business who backed him in an unsuccessful 1987 bid for Baltimore City Council president.

Mr. Young is pushing a bill that would pump millions of dollars into nursing homes, including two with links to his creditors.

Mr. Young, 45, a Baltimore Democrat, maintains that there is no conflict between his role in the General Assembly and his financial ties to the health-care industry.

"I don't feel I'm in any way compromised," he said in an interview last week. "I'm fine with the fact I do an exceptional job here."

Mr. Young, a 20-year veteran of the General Assembly, is recognized as an expert on health-care matters who has worked in the industry over the years. Since November 1991, he has been an assistant to American Ambulance owner Willie Runyon.

The Baltimore company has come under scrutiny in the past few weeks after it was disclosed that Mr. Runyon, his daughter and American gave a total of $95,000 to Gov. Parris N. Glendening's legal defense fund. The money is for expenses stemming from Republican Ellen R. Sauerbrey's unsuccessful challenge of the November election.

In addition, Mr. Runyon, his companies and family members gave Mr. Young at least $47,600 in campaign contributions for the 1994 election and at least an additional $15,000 in Mr. Young's name to Governor Glendening's inaugural festivities.

According to Mr. Young, Mr. Runyon also allows him to help dole out some $500,000 of Mr. Runyon's money to charity each year.

American Ambulance has provided ambulance service for patients in Blue Cross' basic insurance plans for the last decade. But last year, the company went after a piece of the insurer's growing health maintenance organization business.

Mr. Young said he, along with other American representatives, met twice with Blue Cross officials last year, including once just before Christmas, to negotiate a contract to transport the company's HMO patients to and from hospitals and other medical facilities.

American's contract with Blue Cross went into effect Feb. 1, according to spokeswoman Linda Wilfong.

Meanwhile, several bills that could help or hurt Blue Cross are before Mr. Young's subcommittee.

Perhaps the most far-reaching is a controversial measure that would require HMOs to accept any qualified physician as part of their networks. Blue Cross and other HMO operators have lobbied against the idea, which they say would drive up their costs.

Mr. Young declined to comment on the bill publicly, but lobbyists and legislators involved in the issue say he has made clear that he opposes it.

A potentially bigger issue for Blue Cross is its effort to gain state permission to establish a for-profit subsidiary to run its HMOs.

State insurance regulators have rejected the idea, but the company still is considering seeking introduction of a bill to accomplish the goal this session. Blue Cross Chief Executive William L. Jews appeared in January before the Senate Finance TTC Committee, of which Mr. Young is a member, to explain the company's plans and ask for support.

If Blue Cross does seek a bill to establish the for-profit subsidiary, the bill would come before Mr. Young's subcommittee.

Mr. Young said he would judge any issues affecting Blue Cross strictly on their merits.

"I guess if I have to make a choice between what the Blues present, the only consideration is how does it affect the constituents of my district," he said.

In another area where he appears to have a potential conflict, Mr. Young is co-sponsoring a bill that would adjust the state's formula for paying nursing homes through the Medicaid program -- a change that would benefit homes that care for large numbers of Medicaid patients.

The bill, if enacted, would cost the state $19 million in additional -- Medicaid payments next year.

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