CareFirst cuts Del. ties

September 23, 2006|By Stacey Hirsh | Stacey Hirsh,Sun reporter

CareFirst BlueCross BlueShield has ended a six-year affiliation with its Delaware subsidiary, the company announced yesterday.

The separation comes about a month after Delaware's insurance commissioner rejected the latest plan to modify the affiliation. CareFirst said yesterday that both it and its subsidiary, Blue Cross Blue Shield of Delaware, wanted to continue their relationship, but that it would be too expensive and disruptive to continue appealing the matter.

Based in Owings Mills, CareFirst has about 300,000 members in Delaware and nearly 3 million in Maryland, Washington and Northern Virginia. The split is not expected to affect Marylanders.

"We don't believe it is going to have any impact at all on Maryland members, providers, brokers or anyone," said Jeffery W. Valentine, a CareFirst spokesman. "If our Maryland members are seeking health care in Delaware, they will be able to use the BlueCard as they always have, which will enable them to obtain care."

Delaware Insurance Commissioner Matthew Denn released a statement yesterday saying the separation would not affect Delaware Blue Cross members.

"Today's announcement by the companies ends a six-year saga of Blue Cross Blue Shield of Delaware and CareFirst attempting to resolve difficult issues relating to their internal governance," he said in the statement. "To the extent that today's step will allow Blue Cross to focus on the needs of its Delaware members, it will be a positive one for Delaware."

The separation ends an affiliation that dates back to 2000. But after Maryland blocked CareFirst's attempt to convert from nonprofit to for-profit status in 2003 and imposed new rules on the agency, Delaware regulators began to worry its consumers might suffer. The two corporate boards and insurance commissioners have since been trying to reach a compromise.

In June, Maryland Insurance Commissioner R. Steven Orr approved CareFirst's request to make its relationship with Delaware Blues contractual. Delaware Insurance Commissioner Matthew Denn rejected that plan.

Last month, Denn rejected the latest plan to modify the affiliation between CareFirst and the Delaware Blues, a decision that would have resulted in a split if Delaware Blue Cross did not appeal within 60 days. Orr said at the time that if the separation happened, it would have no bearing on Maryland consumers or CareFirst operations.

Denn said in a statement yesterday that he stood by that decision. He said his most recent order was issued because Blue Cross and CareFirst would not provide "financial and other documents necessary to properly evaluate whether the changes the companies were seeking in their relationship would benefit Delaware members."

stacey.hirsh@baltsun.com

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