Blue Cross Blue Shield of Rhode Island will pay $20 million to resolve
federal public corruption charges over payments that its lobbyists made to state
officials, the U.S. Justice Department announced December 13.
As part of the agreement, federal officials agreed not to press criminal
charges against the health insurer as long as it continues to cooperate with
federal and state investigations.
The Providence, Rhode Island-based insurer also agreed to implement ethical
reforms on how it will interact with state officials and not to impose rate
increases to recoup the $20 million fine.
Under the agreement, BCBSRI accepted responsibility for former executives
whom the insurer admitted acted within their authority as lobbyists when they
made illegal payments to elected officials. For example, the insurer paid
$400,000 in insurance brokerage commissions to an unidentified former state
Senate president while the insurer’s executives were lobbying him, the Justice
Department said.
A Justice Department spokeswoman says she could not elaborate on the
circumstances under which the official was paid the commissions. The insurer
paid $74,000 to a communications company to produce a cable access program that
former state Sen. John Celona hosted. Celona was paid more than $13,500 as the
host.
In addition, the insurer paid about $175,500 to a business that former House
Majority Leader Gerard Martineau ran.
Celona and Martineau have pleaded guilty to public corruption charges as part
of the investigation, the Justice Department noted.
The money from the fine will be deposited into a fund to support projects
designed to provide affordable health care services in Rhode Island, according
to the Justice Department.
Filed by Dave Lenckus of Business Insurance, a sister publication of
Workforce Management. To comment, e-mail editors@workforce.com.