Maryland Blues

There is nothing wrong with Carl J. Sardegna's grand vision to transform Maryland Blue Cross and Blue Shield from a non-profit health insurance organization into a competitive health-care management company. But in his zeal to realize this vision, Mr. Sardegna should be careful not to lose sight of the organization's special status as the health insurer of last resort that is supposed to provide affordable health care coverage for Marylanders.When Mr. Sardegna took over the management of the Maryland Blues seven years ago, it was in horrendous financial shape and barely solvent.

April 1 is the official start to the blue crab harvest in Maryland. But don't reach for your mallet just yet. "It's not time for crabs," said Jessica Borowski, a manager at Midtown BBQ and Brew. "It's too cold out. " The crabs seem to agree. The Chesapeake Bay's water temperature hasn't risen enough for the crabs to become active - and catchable. Consumers set on Maryland crabs will see limited availability for now - and prices to match. Prices for Chesapeake Bay crabs are typically high at the start of the season, and people who want them in April will have to pay even more than usual.

Disturbing questions about the operation of Blue Cross and Blue Shield of Maryland raised by the state insurance commissioner need to be answered. And the sooner, the better.In congressional testimony, Maryland Insurance Commissioner John A. Donaho made a number of troubling charges concerning the activities and financial viability of Maryland's largest health insurance organization. Officials of the company say they are baffled by Mr. Donaho's sudden and unexpected outburst.Although four years ago the Maryland Blues came perilously close to insolvency, the organization's financial condition has improved markedly, according to its own financial statements.

Don't let Republican state Sen. Andy Harris' victory over Rep. Frank Kratovil in the 1st Congressional District fool you; this was a terrible year for Maryland Republicans. Gov. Martin O'Malley beat former Gov. Robert L. Ehrlich Jr. by twice as many votes as he did in 2006. Sen. Barbara Mikulski cruised to a 62-36 victory, nearly as large a margin as she earned six years ago at a time when Maryland voters were motivated to oust President George W. Bush. Other than Mr. Kratovil, none of Maryland's Democratic incumbents in Congress dipped below 60 percent of the vote.

Blue Cross and Blue Shield of Maryland has an opportunity to clear the air when its officials appear before the House Economic Matters Committee on July 28. State Insurance Commissioner John A. Donaho has made a number of troubling statements about the management of the Maryland Blues and his inability to effectively regulate the non-profit organization, which provides health insurance to almost half of the state's citizens.Determining the true financial condition of Maryland Blue Cross is an issue that deserves immediate attention.

WASHINGTON -- Blue Cross and Blue Shield of Maryland will face a two-day hearing in September before a U.S. Senate subcommittee on a host of problems, including a "pattern of irregularities" in the Blues' handling of health benefits for federal employees.The state's largest insurer is already under subpoena by the Senate panel for a decade's worth of financial records in a widening Senate investigation into Blues health insurance plans nationwide.Beginning yesterday and continuing today, the Senate Permanent Subcommittee on Investigations is detailing the 1990 downfall of the Blues of West Virginia, the first-ever collapse of a Blues plan, which stuck subscribers with paying their own medical bills.

The governor said yesterday that reports of lavish salaries and perks for Blue Cross and Blue Shield of Maryland executives were "embarrassing," but he voted to approve an $85 million contract with the insurer anyway."

Blue Cross and Blue Shield of Maryland, which has been paying Medicare claims by doctors for the federal government since the mid-1960s, failed to meet minimum standards for federal contractors last year and has been put on notice to improve by April 30 or risk losing its contract.The Health Care Financing Administration (HCFA), which hires companies such as the Maryland Blues to administer Medicare payments, took the rare step of calling in Blues executives to discuss the problems 10 days ago.At that meeting, the top officer at HCFA in charge of Medicare contracts, Carol J. Walton, outlined what amounted to the agency's third warning and corrective plan, first issued by her in a Dec. 17 letter.

At today's hearings on Maryland Blue Cross and Blue Shield's request to set up a for-profit company, the insurance commissioner had better ask some hard questions.Blue Cross wants to sell stock to raise $50 million so it can effectively compete with other insurers and better manage its health maintenance organizations (HMOs). The move has won a preliminary nod from employers that buy group insurance from the Blues and even from Insurance Commissioner Dwight K. Bartlett III.The proposed change will affect millions of Marylanders, not just the 1.4 million persons now covered by the non-profit Blues organization.

The proposed consolidation of the Blue Cross Blue Shield plans of Maryland and the District of Columbia would create a company with about 5,000 employees -- but it remains unclear where all of them would actually work.No decisions have been reached on where the headquarters of the overall holding company would be located or on what functions could be consolidated, officials said both Tuesday, when announcing the proposed merger, and yesterday."That's a to-be-determined issue," said William L. Jews, president and chief executive officer of Blue Cross Blue Shield of Maryland, who would be president and chief executive officer of the as-yet-unnamed holding company which would control both Blues plans.

The Western Maryland Blues Fest runs through Sunday at two venues, Hagerstown City Park (501 Virginia Avenue) and City Central Lot (off North Potomac Street). Tickets Events on Sunday are free. Tickets on Friday are $20-$25, for those age 13 and older and $7 for children ages 6-12. Tickets for Saturday are $35-$40 for those age 13 and older and $7 for children 6-12. Admission is free for children age 5 and younger. Special combination tickets for Friday and Saturday are available in advance for $50, plus a transaction fee. For more information, call 301-739-8577, ext. 116 or go to blues-fest.

WALDORF-- --Even after taking part in a half-century of opening days, Brooks Robinson still gobbles them up like a hard smash to third. Tomorrow night, the former player and broadcaster will experience the first pitch from a different point of view: as owner of the Southern Maryland Blue Crabs, Maryland's newest professional baseball team, and leader of "Crustacean Nation." "It's fun. It's exciting. It really is," the Orioles Hall of Famer says. Everything about the team is new, from 4,100-seat Regency Furniture Stadium with the hand-operated scoreboard to the soft blue and vibrant red uniforms to "Pinch," the fuzzy mascot who resembles a blue crab only after a couple of Natty Bohs.

For political junkies, life in a blue state isn't all that colorful. The presidential campaign, which shifts into overdrive after Labor Day, will rage just over Maryland's borders, but not within. Pennsylvania's electoral votes are up for grabs, as are those in Delaware and West Virginia. Airwaves there will be jammed with candidate commercials, and mailboxes will be stuffed with brochures. Nominees George W. Bush and John Kerry - or high-wattage surrogates - will parachute in to woo undecided voters.

Maryland's women's lacrosse team wasted no time asserting itself against Top 10 opponents this past week. Acacia Walker scored just 26 seconds into yesterday's game, setting the tone as the No. 7 Terrapins dealt No. 9 Johns Hopkins its first loss of the season, 14-11, at Homewood Field. Maryland's victory came on the heels of Wednesday's 13-8 win over No. 2 Georgetown in which Delia Cox scored 19 seconds into the game. "It's important for our team to come out with a quick start," said Walker, whose team has won nine straight games.

In 1989, there were 73 Blue Cross-Blue Shield plans, all nonprofits. Today, there are 46, but some of them are traded on Wall Street and some are for-profit mutual companies. And some of them are nonprofits that have for-profit subsidiaries. If CareFirst BlueCross BlueShield, Maryland's largest health insurer, converts to for-profit status, as is widely expected, it will be one more change in a rapidly changing Blues world. The national BlueCross BlueShield Association reports 36 mergers, for-profit conversions and other transactions among Blues plans in the past decade.

William L. Jews, chief executive of Blue Cross Blue Shield of Maryland, asked state insurance regulators yesterday to approve a business consolidation with the District of Columbia Blue Cross plan without imposing "costly and unnecessary" conditions.His comments came at the end of the second and final hearing on the consolidation plan before Steven B. Larsen, Maryland's insurance commissioner.Consultants and consumer groups have asked the regulators to impose conditions on the Blue Crosses' affiliation to ensure adequate regulatory control and to protect charitable assets if the two later convert to for-profit status.

Blue Cross and Blue Shield of Maryland Inc. reported profits of $15.8 million for the quarter ended June 30, an increase of 426 percent from the same period last year.The jump in earnings, however, was overshadowed by a reported 1.6 percent drop in the insurer's revenues during the second quarter as some subscribers moved their business elsewhere.The company, the state's largest health insurer, had planned for 6.5 percent in revenue growth, said Gary C. Baker, the company's controller.Like other insurers, the Blues, which insure or administer insurance for 1.4 million Marylanders, have been in the midst of a changing health care market as consumers shift away from traditional insurance and into managed care programs, such as health maintenance organizations.

The National Association of Blue Cross and Blue Shield say it's "optimistic" that the Maryland Plan will continue to improve its financial condition under the company's new leadership.The association, which licenses the Blues programs, attributed its optimism in Blue Cross and Blue Shield of Maryland to "a series of positive performance initiatives" put in place at the insurer in recent months, according to a statement.The national Blues issued its assessment of the troubled plan's future earlier this week after the association's president met in Washington Monday with Frank A. Gunther, chairman of the Maryland Blues, and William A. Beasman Jr., interim chief executive.

An arbitration panel ruled yesterday that Blue Cross Blue Shield of Maryland must pay $3.5 million in retirement benefits, interest and legal fees to Carl J. Sardegna, the chief executive officer who quit under pressure in 1992 with the company on the brink of insolvency.In 1990, the Blue Cross board had approved a $2 million "supplemental executive retirement plan" to be paid to Sardegna whenever he left. The retirement payment quickly became controversial when Sardegna quit after a U.S. Senate Committee investigation which concluded that there had been poor management and extravagant spending at the Maryland company.

The proposed consolidation of the Blue Cross Blue Shield plans of Maryland and the District of Columbia would create a company with about 5,000 employees -- but it remains unclear where all of them would actually work.No decisions have been reached on where the headquarters of the overall holding company would be located or on what functions could be consolidated, officials said both Tuesday, when announcing the proposed merger, and yesterday."That's a to-be-determined issue," said William L. Jews, president and chief executive officer of Blue Cross Blue Shield of Maryland, who would be president and chief executive officer of the as-yet-unnamed holding company which would control both Blues plans.