Mountain State Blue Cross and Blue Shield in West Virginia has severed its ties to the former Blue Cross and Blue Shield of Ohio.
Gregory K. Smith, chairman, president and chief executive officer of Parkersburg-based Mountain State, said the break was prompted by fears that the West Virginia plan would lose its membership in the national Blue Cross and Blue Shield Association if the partnership continued.
In March, the association stripped the Ohio plan of its Blues licensing and trademark agreement because of its effort to sell itself to Columbia/HCA Healthcare Corp. State insurance regulators blocked the deal, but the association still ousted the plan, now called Medical Mutual of Ohio.
In 1990, the Ohio Blues joined with Mountain State to guarantee coverage for enrollees of Blue Cross and Blue Shield of West Virginia, which had been declared financially insolvent. The Ohio plan also loaned Mountain State $10 million and gained majority control of its board.
Smith said the Blues association's concern that Mountain State would now be controlled by a non-Blues organization led Mountain State to pursue independence. He said the Ohio plan agreed to cede control of the board to Mountain State.
Smith said Mountain State is looking for another Blues plan to assume control of the $9.3 million balance remaining on the Ohio plan's loan and to pursue other partnership ventures. He said he has so far initiated discussions with Highmark Blue Cross and Blue Shield in Pittsburgh and Anthem Blue Cross and Blue Shield in Indianapolis.
In 1996, Mountain State lost $1.4 million on total revenues of about $375 million. It had $20 million in reserves.