A report commissioned by the Massachusetts insurance department recommends the department increase its regulatory oversight of financially troubled Blue Cross and Blue Shield of Massachusetts and the plan's two HMOs, HMO Blue and Bay State Health Care.
Massachusetts Insurance Commissioner Linda Ruthardt released the report last week. Arthur Andersen, a national accounting and consulting firm, prepared the report on behalf of the department.
The release of the report comes on the heels of the Blues plan's first-quarter loss of $17.2 million. The plan lost $90 million in 1996 after a $21 million profit in 1995. The plan said the first quarter 1997 deficit was 30% less than expected under a turnaround plan instituted last year.
Earlier this year, the insurer announced plans to split itself into three not-for-profit companies to be more competitive (Feb. 10, p. 8). Approval from the insurance department is pending.
Ruthardt said she expects the Boston-based Blues plan to fully comply with the report's recommended oversight measures. They include allowing a department representative to attend all board meetings and special committee meetings, and permitting the department to monitor day-to-day transactions and significant financial transactions, including approval authority over large expenditures.
In a statement, the plan agreed to the increased oversight.