A prominent state delegate has recused himself from legislation involving CareFirst BlueCross Blue Shield's proposed conversion to a for-profit company, and the General Assembly's ethics committee is looking at whether a second House leader should do the same.
Del. John A. Hurson, chairman of the House Environmental Matters Committee and former majority leader, withdrew Jan. 2 from participating in discussions or voting on legislation related to the CareFirst conversion plan. His full-time job is with Ketchum Public Relations in Washington, which CareFirst recently hired for a publicity blitz supporting the plan.
Additionally, the ethics committee this week questioned whether Del. Alfred W. Redmer Jr., the House minority leader, might have a conflict of interest in voting on legislation related to CareFirst because his employer, Dallas-based BenefitMall, does $300 million in business with the health insurance company to market its products.
"This is such a high-profile thing, we not only have to deal with the factual aspect ... but the appearance," said Del. Kenneth C. Montague Jr., a Baltimore Democrat who is co-chairman of the ethics committee. "What appearance does this raise to the public?"
The committee asked its legal counsel, William G. Somerville, to inquire further about Redmer's and his employer's relationship with CareFirst.
CareFirst wants to change its status from a nonprofit organization to a for-profit business, then sell its operations for $1.3 billion to California-based WellPoint Health Networks. CareFirst officials say the conversion will help strengthen the company's position in an increasingly competitive market.
Some legislative leaders oppose the deal, saying CareFirst should focus on its mission of providing affordable health care to Marylanders rather than profits. They have drafted sweeping legislation to make the deal more difficult.
By hiring Ketchum, CareFirst is silencing Hurson, one of the House leadership's most active players in health care policy. Hurson in previous sessions was a frequent co-sponsor of health care bills supported by Speaker Casper R. Taylor Jr. - a vocal critic of CareFirst. This year, Hurson's name is conspicuously absent on such legislation.
"I am not allowed to participate in deliberations in any way on this issue, and that includes talking to the press," the Montgomery County Democrat said.
Taylor said he regrets that Hurson will have to sit out the CareFirst debate, but noted that an occasional recusal is one of the trade-offs of having a part-time legislature.
The Environmental Matters Committee handles many health-related issues but not conversion. Hurson said his recusal does not apply to other health-related issues on which CareFirst might take a position.
Redmer, a Baltimore County Republican, also does not sit on the House committee hearing the CareFirst legislation. He nonetheless disclosed his company's relationship with CareFirst to the ethics committee, but signed a statement that he believes he can participate in legislative action relating to the issue "fairly, objectively, and in the public interest."
Redmer said he has no ties to his employer's contract with CareFirst. He said he represents BenefitMall to independent health insurance brokers, telling them about the products and services his company offers. He does not have any holdings in the company, he said. "As the issues develop, I still may or may not decide to participate," Redmer said.
Somerville said that so far, he has not seen anything to prevent Hurson or Redmer from voting on the CareFirst legislation, although he respects Hurson's decision to recuse himself because of his leadership position. "Except in the most extreme case, you disclose and then vote," Somerville said.
As a result of the ethics committee's concerns, Somerville said he would ask Redmer such questions as whether he is a partner or just an employee of BenefitMall and what percentage of his company's business comes from CareFirst. If it's 20 percent, he said Redmer should not have to recuse himself.
"If it's 95 percent of their business, that would be different," Somerville said.
Scott Kirksey, a spokesman for BenefitMall, would not disclose the details of his company's relationship with CareFirst, but said, "We do have a significant relationship with CareFirst."