Blue Cross and Blue Shield of North Carolina Files Suit Over Information
Jul. 2–Blue Cross is suing the organization that released private company documents showing the insurer spent $500,000 or more at the U.S. Open in Pinehurst as an event sponsor and to house and entertain company executives and associates.
The Chapel Hill insurer claims the group, ProCare, engaged in a civil conspiracy to obtain and publish the documents and violated state laws regarding computer records and unfair business practices.
Gary Pearce, a consultant who helped launch ProCare in 2002, said the lawsuit was a strong-arm ploy to muzzle the group.
“Blue Cross wants to intimidate ProCare and anybody else who criticizes them and we’re not going to be intimidated,” he said. “They bragged about the fact they sponsored [the U.S. Open] and how it was the right thing to do.”
A spokesman for Blue Cross and Blue Shield of North Carolina said there was more than that to the suit, which was filed Friday in Wake County Superior Court.
“It’s a bigger issue than that,” said Mark Stinneford. “We contend they took information they weren’t entitled to and used illegal means to get it. The larger issue is we can’t be complacent about the release of any business information.”
The information listed the Pinehurst housing accommodations for a dozen company executives and their spouses, the golfing options for Blue Cross guests and employees and the company’s hospitality areas. It also noted Blue Cross had 100 tickets per day to the golf event for guests.
News about the company’s spending on the U.S. Open followed a report earlier by ProCare that Blue Cross had spent hundreds of thousands to send 275 of its brokers and sales agents on a Caribbean Island cruise in February.
Combined with the nonprofit insurer’s large profits — it had a combined profit of $350 million for 2004 and 2003 — the expenses triggered an outcry from regulators and the public.
“We want a debate about their obligation as a nonprofit and instead of debating that issue, they choose to attack anybody who questions them,” Pearce said. “I think that goes to the very heart of whether they’re operating in the public’s interest.”
But in its nine-page lawsuit, Blue Cross paints a more sinister picture of ProCare.
In the suit, Blue Cross claims ProCare officials contacted “one or more unknown employees” of the insurer and “convinced or coordinated” to get the documents, which contain “proprietary business and financial information.” The suit also claims state law prohibits unauthorized copies of any computer data and ProCare’s actions constitute unfair and deceptive trade practices.
Blue Cross also asked the court to prevent ProCare from releasing any more company documents.
Stinneford said the documents ProCare distributed could hurt Blue Cross’ position in the market. It is the state’s largest health insurer.
“It’s the kind of thing that could have an impact on the competitive marketplace if we just let it go,” he said.
The lawsuit seeks compensatory and punitive damages in excess of $10,000.
“Our customers depend on us to safeguard sensitive information every day,” Blue Cross CEO Bob Greczyn said in a release. “We’re left with no choice but to act swiftly to protect our company against unlawful schemes to take and misuse confidential business information to further a narrow political or economic agenda.”
ProCare was formed in 2002 as a coalition of heath care providers such as hospitals and physicians who opposed the insurer’s attempt to convert to a for-profit company.
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