Criticizing newspaper advertisements targeting enrollees of CareFirst health plans, Rep. Pete Stark (D-Calif.), ranking member of the House Ways and Means Committee, is accusing the Blue Cross Blue Shield Association of shirking its responsibility of acting in the best interests of the public.
The Chicago-based Blues association says Stark misinterprets the purpose of the newspaper advertising campaign and of the pending litigation.
In a scathing letter sent Wednesday to association President and CEO Scott Serota, Stark says the Blues trade group has "overstepped its bounds" by running ads in the Washington Post and Baltimore Sun noting that CareFirst, Owings Mills, Md., has lost its Blue Cross Blue Shield license less than a week after a federal judge approved an 11-day stay to legal proceedings involving the license.
Blues spokesperson Chris Hamrick says the association stopped running the ads after two days at the request of Maryland Gov. Robert Ehrlich.
According to the Stark letter, "The purpose of the stay was not to provide the Blue Cross Blue Shield Association with extra time to advertise and frighten the public about the stability of their health benefits. But, that is exactly what you are doing."
Stark continues, "I'm not a lawyer, but when I read the court's orders it appeared to me that all determinations with regard to this case are on hold through June 3rd. That means that CareFirst has NOT lost its license."
Stark also blasts the Blues group by telling Serota, "Last time I looked, you were a trade association--not an omnipotent force that could override state laws at will."
However, Hamrick says the letter is filled with "misunderstanding" of the group's intent.
"There's misunderstanding that we're suing to terminate the license," Hamrick says. "The license was terminated last week (when a new Maryland law took effect). We're suing to prevent the use of our marks."
The association sued CareFirst in federal court in Chicago last week to prevent CareFirst from continuing to use the Blues name and trademarks in Maryland, Delaware, Virginia and the District of Columbia. CareFirst has 3.2 million enrollees in those jurisdictions and also insures 600,000 federal employees and 135,000 current and retired Maryland state employees.
Maryland Attorney General J. Joseph Curran Jr. then sued the Blue Cross Blue Shield Association in Baltimore City Circuit Court, seeking an injunction against a move to strip CareFirst of its Blues license.
CareFirst then went to U.S. District Court in Baltimore, arguing that a new law that gives the state more control over the largest healthcare payer in Maryland is unconstitutional. J. Frederick Motz, chief judge of that federal court last Friday approved an 11-day cooling-off period, a break that all involved parties agreed to.
Stark argues that the Blues association's newspaper ads "violate the spirit of the stay."
Blues spokesperson Hamrick says the ads were intended "to be informative and helpful and not to cause a backlash." According to Hamrick, "CareFirst is not going out of business. People still have their health insurance."