It is out of the kettle and into the frying pan for Blue Shield of California this month. On the heels of suing a former executive for telling tales out of school, last week Blue Shield was widely accused of reneging on a pledge to give $140 million to charity over the next 10 years.
The nonprofit company had pledged the donation as part of its negotiations to win approval for a large acquisition. The accusations have come from the director of Health Access, a nonprofit organization representing health consumers in California.
Even the California Department of Managed Health Care has expressed unhappiness with Blue Shield’s actions.
In a press release issued by the Department when it approved Blue Shield’s purchase of Care1st Health Plan, it noted that Blue Shield had agreed to donate $140 million to the Blue Shield Foundation or other health access nonprofits approved by the Department.
The thing is, however, Blue Shield already gives about $35 million a year to the Foundation or similar organizations and the company now claims it never promised and never intended to give additional money. In fact, under the terms of the agreement as interpreted by Blue Shield, the company could probably cut its charitable contributions.
The devil may be in the details, and Blue Shield may not be cheating, but the huge insurer’s reputation is certainly taking a flogging.
