Larsen picked for CareFirst panel

THE BALTIMORE SUN

Steven B. Larsen, who as Maryland insurance commissioner sharply criticized the board of CareFirst BlueCross BlueShield, was among nine people named yesterday by state officials to a panel that will choose new CareFirst board members.

Under a law passed last year and modified in a court-approved settlement, a nine-member nominating committee will choose five new members of CareFirst's board by the end of the year.

They will also submit names next year for the seven remaining Maryland seats on the board, and the board will elect people to fill those seats. The other members of the 21-member board are from the District of Columbia and Delaware.

The nominating committee will be chaired by Frederick W. Puddester, budget director of the Johns Hopkins University and a former state budget secretary. Puddester was one of three panel members appointed by Senate President Thomas V. Mike Miller.

Miller's other two selections are former legislators Beatrice P. Tignor, chairwoman of the Prince George's County Board of Education, and F. Vernon Boozer, a Baltimore County lawyer.

Gov. Robert L. Ehrlich Jr. named James T. Brady, former economic development secretary and director of Ehrlich's transition team; Marjorie S. Holt, a former member of the House of Representatives; and Robert E. Warfield, president of an Ocean City real estate firm.

Larsen, who entered private law practice after his term as commissioner expired in the spring, was among three appointed by House Speaker Michael E. Busch. Busch's other two choices were Frances B. Phillips, health officer for Anne Arundel County, and Dr. Reed A. Winston, medical director for the family care practice at Bon Secours Baltimore Health System.

Busch said Larsen was "almost an essential choice - he has the total background on the issue. The speaker said he, Ehrlich and Miller had met to discuss the nominating committee, and that each was comfortable with the others' choices. Overall, Busch said, it is "a good cross-section" of the state.

CareFirst, a nonprofit since its creation in 1937, filed in 2001 to convert to for-profit operation and be sold to California-based WellPoint Health Networks Inc. After extensive hearings, Larsen in March rejected the deal as not in the public interest. His blistering 200-page report was critical of the board and management.

He said the sale process ignored CareFirst's nonprofit charter, was tainted by the prospect of large bonuses for company executives and was tilted by conflicts of interest.

Larsen's report led the General Assembly to pass, unanimously, the law that created the nominating committee and locked CareFirst's nonprofit mission into law. The law also calls for the legislature to name a watchdog committee for CareFirst, and the members will be appointed in the fall, Busch said.

CareFirst's board members have rejected the criticism. "Our board is incensed," James C. Simpson, one of the directors, said last month.

A CareFirst spokesman, Jeffery W. Valentine, offered no comment yesterday on the selections for the nominating committee but said, "We're anxious to work with this group and provide any assistance they might need in finding excellent candidates for the CareFirst board."

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