Blue Cross calls, mailers get NC lawmakers' notice

AP News
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Posted: Nov 24, 2009 6:19 PM

State lawmakers and attorneys are scrutinizing Blue Cross and Blue Shield of North Carolina for its attempt to influence the national health care debate through direct mail and possibly illegal automated phone calls.

The state Attorney General's office confirmed Tuesday it was investigating North Carolina's largest health insurer for prerecorded calls that started late last month. Based on a preliminary review, some calls linked to the company appear to have violated the law, according to a letter from a state attorney.

Company spokesman Lew Borman said Blue Cross officials provided information as part of the inquiry and are in discussions with Attorney General Roy Cooper's office.

The disclosure came as 20 state lawmakers asked Cooper and Insurance Commissioner Wayne Goodwin to examine the calls and mailers urging citizens to contact U.S. Sen. Kay Hagan and ask her to oppose a new government-run health insurance plan.

Blue Cross, with 3.7 million customers in North Carolina, is a unique not-for-profit private corporation that pays taxes but benefited from a tax-preferred status for decades until the 1980s.

It's not clear when the investigation will be complete, but the company could face fines if Cooper deems the calls illegal. A group that made unlawful automated phone calls to North Carolina voters before the 2008 primary was ordered to pay a $100,000 penalty.

Borman said the company believes its advocacy has been lawful. Blue Cross leaders believe the calls and mailers were primarily educational because they didn't focus on specific legislation, so they are being treated as legitimate company expenses rather than paid through a political committee, he said.

"We felt like we have the right and the responsibility to be involved in the debate," Borman said.

The company is allowed to express its opinions on topics but not using company revenues, which include monthly premiums of insurance plan members, said Rep. Pricey Harrison, D-Guilford, who supports a public insurance option and helped pull together the lawmakers' request.

"We recognize protected free speech," Harrison said in an interview. "I think it's the method in which they've engaged in it that seems inappropriate."

Goodwin has asked Blue Cross to respond to legislators' concerns, spokeswoman Johanna Royo said.

The criticism is the latest for Blue Cross, which also administers the health insurance program for state employees, retirees and their dependents.

The state employees' union has criticized the company and legislative leaders because Blue Cross wasn't told to cut costs to help diminish higher out-of-pocket costs and dependent care premiums as part of a $675 million bailout of the state worker plan.

The latest flap involves efforts by Blue Cross to join the insurance reform debate in Washington.

Both the House and Senate plans pushed by Democrats would create a government health plan to compete with the insurance industry and impose new taxes to help expand coverage. Chief Executive Officer Bob Grecyzn said in a video on a Blue Cross Web site those idea would actually make health care worse.

The automated phone calls alerted listeners to an upcoming mailer telling recipients to sign a postcard urging Hagan to oppose government-run health insurance.

Cooper's Consumer Protection Division began investigating the so-called "robocalls" after a written complaint from Tryon resident Alfred Haskell, who wrote that the voice on the call "wanted us to influence Sen. Kay Hagan in a way that violates our beliefs."

The Attorney General's Office said for a robocall to be legal, it must clearly identify the caller, state the nature of the call and provide contact information.

"Our initial assessment is that certain calls purported to be made on behalf of (Blue Cross) do not appear to meet the third requirement," Assistant Attorney General David Kirkman told the company in a Nov. 9 letter.

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On the Net:

Blue Cross Blue Shield of N.C. on health reform: http://www.nchealthreform.com