The District has sued Group Hospitalization and Medical Services Inc., the portion of CareFirst BlueCross BlueShield operating in the District. Suit was filed in D.C. Superior Court this afternoon, according to a docket listing.

More on what prompted Attorney General Peter Nickles to file the suit here and here.

LL is trying to get his hands on the complaint. More to come.

UPDATE, 5:05 P.M.: Here is the complaint. The case has been assigned to Judge Natalia Combs Greene; initial conference is scheduled for Sept. 26.

UPDATE, 5:19 P.M.: CareFirst has issued a corporate statement regarding Ward 3 Councilmember Mary M. Cheh’s actions, which reads in part, “We are disappointed that the DC Council’s Committee on Public Services and Consumer Affairs voted today to take this action. Given CareFirst’s compliance with regulatory reporting requirements in the District, taking such a confrontational stance seems excessive and wasteful, especially since, if asked, CareFirst would supply any requested information….CareFirst’s role in the community has already been examined by Washington, D.C. regulators and their findings affirm that CareFirst meets its obligations. We are confident that any reasonable review will find that CareFirst meets its obligations both to its members and the communities we serve.”

UPDATE, 5:22 P.M.: In a phone interview, Cheh says the Nickles lawsuit is not at odds with her own efforts, calling them “parallel tracks.”

The Nickles suit, she notes, is focused solely on the propriety of the size of GHMSI’s surplus, while Cheh says she intends to investigate the surplus with “a broader lens.”

“I want to look at the surplus in the lens of continually rising rates, high levels of executive compensation, an acknowledgment that they have a responsibility to return community benefits to their subscribers and to the District in general. All of that is of a piece.”

UPDATE, 5:50 P.M.: Some highlights from the complaint, which charges CareFirst with “willful violation of charter” and “breach of charitable trust”:

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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.