R.I. Blues Willing to Accept Public Board Members

June 4, 2004

The acting chief executive of Blue Cross & Blue Shield of Rhode Island said the company would accept state appointments to its board, as lawmakers consider stricter regulations for the embattled health insurer.

Lawmakers have proposed appointing nearly half of the nonprofit health insurer’s directors. The bill follows criticism of the company’s management by Gov. Don Carcieri, lawmakers and others.

At a hearing on Wednesday before the House Corporations Committee, Blue Cross acting chief executive James Purcell said the company is willing to allow the state to appoint three new members, drawn from the public, to the company’s board. Purcell also said the insurer and its board would work with the legislature to restore public confidence.

No vote was taken on bills that were the subject of Blue Cross’s testimony. The hearing comes as lawmakers consider a number of bills governing the activities of Blue Cross, the dominant health insurer in Rhode Island.

Blue Cross’s chief executive and president, Ronald Battista, resigned last month, following complaints about corporate perks and rising premiums. The company’s financial rating by Standard and Poor’s has been downgraded.

Last month, the national Blue Cross Blue Shield Association said that if the bill and other proposals increasing state regulation become law, the Rhode Island insurer would lose licenses to use the Blue Cross brand name, including its logo. The company also would be barred from participating in national Blue Cross programs.

“Too much government control would violate the licensing agreement, which requires that (Blue Cross) remains an independent body,” Richard Beretta, an attorney representing the national Blue Cross association, said after the hearing.

The association said the loss of licenses would cause more than 600,000 Rhode Island subscribers to lose access to out-of-state participating providers.

Other bills being considered by lawmakers would prohibit compensation for Blue Cross board members, cap administrative costs and would create a position of health insurance administrator.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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