City Desk

Cheh, Nickles Gear Up to Take On CareFirst

Let the games begin: Sources say Ward 3 Councilmember Mary M. Cheh is poised to kick off an investigation of CareFirst BlueCross BlueShield, the District's largest health insurer, on changes that it shirks obligations to provide public benefits to District's residents.

LL teed up the issue in his column last month. Currently, the portion of CareFirst that operates in the District is running a surplus in excess of $700 million, and some politicos believe that money is owed to District residents as part of CareFirst's responsibility as a "charitable and benevolent institution," according to its charter.

CareFirst, of course, disagrees, holding that the charter language means nothing of the sort.

The investigation is pending a vote by Cheh's public services and consumer affairs committee this afternoon. The committee action would grant Cheh subpoena power to inspect company documents and command testimony from executives.

Meanwhile, rumors abound that Attorney General Peter Nickles has plans of his own to take on CareFirst, through a legal attempt to make CareFirst comply with its alleged obligations. A complaint has been drawn up, sources say, and an announcement of the lawsuit's filing could come before the end of the week.

UPDATE, 3:45 P.M.: Cheh has issued a statement, explaining her interest in pursuing CareFirst was prompted in no small part by former CEO William Jews' $18 million severance, which is currently being challenged by the Maryland government.

“I want to know why, in the face of rising insurance premiums, [CareFirst's local subsidiary] is sitting on three-quarters of a billion dollars of surplus and paying fabulous sums to top executives,” Cheh says.

Meanwhile, WTOP's Mark Segraves is reporting that Cheh has confirmed that Nickles will be filing suit against CareFirst shortly.

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