Byron seeks to restore Assembly's faith in CareFirst

Delegates are receptive to new chair but still skeptical toward CEO

January 30, 2004|By M. William Salganik | M. William Salganik,SUN STAFF

CareFirst BlueCross BlueShield's new board chair promised Maryland lawmakers yesterday that she will work to restore their faith in the nonprofit insurer.

"I'm committed to restoring the legislative trust that was there for so many years for this company," Beverly B. Byron, the former congresswoman who was chosen last month to chair Care First's board, told a House Health and Government Operations Committee briefing. "That's a pledge I make to you all."

Though legislators were generally receptive to Byron, who did most of the speaking for CareFirst, they continued to show skepticism toward William L. Jews, the insurer's chief executive officer and the chief architect of a failed deal to sell the insurer to a California company.

The state's largest health insurer was pounded by legislators last year as it sought approval for the sale while rewarding Jews and other executives with hefty bonuses. After CareFirst's deal was blocked by Steven B. Larsen, then Maryland's insurance commissioner, lawmakers voted unanimously to lock in CareFirst's nonprofit status and replace Maryland's members on the insurer's board of directors.

Yesterday, committee Chairman John Adams Hurson pressed Jews on what CareFirst was doing to live up to its new mission statement, which promises that as a nonprofit it will pursue such goals as "support public and private efforts to meet needs of persons lacking health insurance."

When Jews mentioned participation in a senior prescription program and in reforming Maryland insurance rules for small employers, Hurson shot back, "Those are all things CareFirst was doing before. The legislature was looking for a change."

Jews said some programs to help the uninsured "could be very expensive, but these are the kinds of things we can go back and revisit."

After the session, Hurson said the board goals represented "a lot of happy talk," but that the committee would be monitoring CareFirst for specific actions fulfilling its nonprofit mission.

Byron said after the briefing that, in addition to planning more appearances at the legislature, she had "called every member of the legislature I know."

"I can't do it alone," she said. "I need your help."

Byron said two new CareFirst board members chosen by a state nominating committee as part of legislated reform were named this week to chair key board committees.

Dr. William R. Brody, president of Johns Hopkins University, will lead the strategic planning committee, while Michael J. Kelly, former dean of the university of Maryland law school, will chair the compensation committee.

Those two groups were the key board entities in developing the sale deal and executive bonus plan.

Legislators, including some who were among CareFirst's sharpest critics last year, joined in the tone of conciliation, while defending their actions of last year.

"With the kind of compensation package" being offered to CareFirst executives, "it didn't seem like the people of Maryland were being protected," said Del. Shane Pendergrass, a Howard County Democrat who was a sponsor of the reform legislation. Now, she said, "I would hope we could go forward with mutual understanding."

Another vocal critic, Del Dan Morhaim, a Baltimore County Democrat, said, "I like that we're all talking. It's going to take some time to get real trust back.

"I hope this is not a one-shot thing for this briefing."

One committee member was not reassured. Patrick L. McDonough, a Baltimore County Republican, said that if the board wants to placate legislators and subscribers, "I hope you will consider management replacement."

The Maryland insurance commissioner, Alfred W. Redmer, told the committee he has been working with CareFirst and the insurance commissioners of Delaware and the District of Columbia - where CareFirst also operates - to address concerns about the Maryland legislation.

Redmer said he will bring those concerns back to the committee so that they can be addressed in legislation.

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