PrimeHealth top officials to be paid through July

Md. insurance agency agrees to settlement

April 24, 1999|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

The Maryland Insurance Administration has reached a settlement agreement with four top executives of the Lanham-based health maintenance organization that was placed in receivership last year in the wake of an investigation of former state Sen. Larry Young.

Under the agreement reached late Tuesday, the four executives of PrimeHealth Corp. will continue to be paid through July. Court records indicate that each is earning about $100,000 a year.

The settlement applies to three vice presidents, Wayne Clarke, Anthony Isama and R. Glenn Beatty, and the company's general counsel, Leonard McCants.

Insurance Commissioner Steven B. Larsen had asked a circuit judge in February for permission to fire the four, contending that their services were no longer needed and that the salaries were further depleting the company's assets.

The four executives disputed the action, contending that they had contracts entitling them to a full year's severance pay.

Larsen said Wednesday that the settlement will help conserve PrimeHealth's resources so that creditors can be paid as much as possible. Creditors had a February deadline to file claims for services provided to Prime-Health before the receivership.

"Obviously, we need to do anything we can to try to save money," Larsen said.

McCants confirmed that the settlement had been reached.

PrimeHealth was placed in receivership last year by Larsen after an audit concluded that the company was insolvent.

Young, who was expelled from the state Senate last year, has been charged with bribery and extortion for his alleged role in helping Prime-Health win a state license and contract. The West Baltimore Democrat, who has pleaded not guilty, is scheduled to go on trial in September.

Larsen said James Gordon, the receiver running PrimeHealth, is preparing a rehabilitation plan that is expected to be completed within a few months.

Despite the receivership, PrimeHealth has continued to serve about 14,275 patients under the state and federally funded Health Choices program.

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