Blue Cross and Blue Shield of North Carolina’s (BCBSNC) planned venture with Oregon-based Cambia Health Solutions could be in jeopardy following the June DWI arrest of BCBSNC CEO Patrick Conway.
The two companies agreed to form into a $16 billion affiliation covering more than six million people in March, but following news of Conway’s arrest, the deal has been put on “hold” while Cambia waits for the legal process to come to a conclusion.
Conway was arrested in June on charges of driving while impaired and misdemeanor child abuse following an accident on Interstate 85 in Randolph County. At the time of the incident, Conway’s two daughters were in the vehicle.
However news of the incident, which were known to Blue Cross’ board, were not made public until this month.
“Cambia Health Solutions and our Board of Directors are deeply troubled by the emerging details of the situation involving Blue Cross and Blue Shield of North Carolina’s CEO,” a Cambia statement read. “Transparency and integrity of leadership are imperative to Cambia management and our board. We have decided to temporarily pause the proceedings toward the Strategic Affiliation with BCNC until all the facts are known and the legal process concludes. The merits of the Strategic Affiliation are sound and built on a shared strategic vision to make health care better, simpler and more affordable for individuals and their families.”
Blue Cross N.C. also released a statement stating the company “has decided to put its proposed strategic affiliation with Cambia Health Solutions on temporary hold,” adding, “Blue Cross NC is committed to focusing on its customers, employees and the North Carolina communities it serves.”
The two not-for-profits were set to enter into a strategic affiliation that would mean a long-term management services contract that would include sharing management, administrative, operational and other corporate services together. The new entity will be called Cambia Health Solutions. The headquarters will be located in both Durham, and Portland, Oregon.
Conway, 45, was suppose to serve as the joint entity’s CEO.
Even without Cambia getting cold feet on the deal, the affiliation would have required approval from the North Carolina Department of Insurance, whose commissioner – Mike Causey – berated Blue Cross for working to hide the arrest from the public’s attention and not being “more accountable, responsible and transparent to their policyholders and to the public at large.”
Conway, who refused a breathalyzer test on the date of the incident, is scheduled to appear in court on Oct. 8.
Following news breaking regarding the incident, Blue Cross issued a release saying its board deduced that “Patrick’s strong leadership will continue to be an asset” and that “he will remain as President and CEO.”
Since, footage of the incident was acquired by news outlets in the state, showing Conway’s black SUV swerving on the interstate before colliding with a tractor trailer. It is not clear whether the Blue Cross board of trustees were aware of the cell phone video before announcing Conway will remain as the company’s CEO.
Conway’s lawyer, Thomas Walker of Alston & Bird, issued this statement on behalf of Conway regarding the incident.
“He’s deeply ashamed and embarrassed about the events of June 22nd,” the statement read. “Particularly for the pain he has caused his family and his co-workers. He knows his conduct was unacceptable and not consistent with who he is as a person. He has never had an incident like this before. To his credit, he immediately disclosed the incident to the Blue Cross NC Board. He stepped down from his daily duties and voluntarily and successfully completed 30 days of inpatient substance use treatment. He’s committed to continuing to handle this appropriately going forward and will do so.”
Date: September 26, 2019
Source: The Business Journals