Blue Cross CEO resigns after DWI charge

Resignation prompts halt of expansion deal with Oregon insurer

BCBS
Blue Cross Blue Shield of North Carolina headquarters in Durham. N.C.

RALEIGH — Amid pressure from North Carolina’s top insurance regulator, video of an alleged drunk driving incident and publication of the arrest report, the chief executive of North Carolina’s dominant health insurer resigned last week.

Dr. Patrick Conway, 45, was charged with driving while impaired and misdemeanor child abuse following the June 22nd crash. No one was injured, but Conway’s two daughters were in the car. His next court hearing is October 8th.

As the news began to circulate more widely last week, Insurance Commissioner Mike Causey said Conway had shown a lack of leadership and professionalism related to his arrest from the crash on Interstate 85 in Randolph County. Causey also accused the Blue Cross board of exercising poor judgment in revealing the arrest and the circumstances surrounding what happened. Causey said he didn’t learn about it until the week before last after a news report surfaced.

“It has become apparent to me that there’s been a significant breakdown in the corporate governance at Blue Cross and Blue Shield of North Carolina,” Causey said at a news conference last week in Gastonia. “It pains me greatly because this tragic incident has put a big dent in the reputation of a good company. But there is no path forward for this office to have a trusting, confident and reliable working relationship” with Conway, he added.

Causey had initially called for an interim CEO to step in while the case was resolved. Before last Wednesday’s resignation, Blue Cross board chairman Frank Holding Jr. wrote to Causey that Conway had completed a 30-day inpatient substance abuse treatment program.

“Based on detailed information shared by the facility, concerning Dr. Conway’s assessment and treatment, the board was satisfied that Dr. Conway could continue to provide strong leadership to Blue Cross NC,” Holding wrote. In the aftermath of last week’s events, Causey said he doesn’t believe the board had all the information about Conway’s arrest when they made that decision.

The statement attributed to the company’s board said that they engaged outside lawyers and other experts to examine the crash immediately after it happened. It said it asked for his resignation after more investigative material surfaced.

“As a mission-driven organization, BlueCross NC is committed to doing business with honesty, integrity and fairness. The details that recently emerged related to Dr. Conway’s arrest depict behavior that falls short of our standards,” the board said in the statement.

The board has named Gerald Petkau, who has served as chief operating officer, as interim CEO.

An investigative report of the accident obtained by WRAL-TV and written by the Archdale police investigating officer said Conway had bloodshot eyes and a strong odor of alcohol at the scene and became “absolutely belligerent” at the police department.

“I deeply regret this incident and the events that day as it is not consistent with the conduct that I strive to embody in my personal and professional life,” Conway said in a statement. “I am taking this very seriously and am committed to dealing with the situation appropriately.”

Deal linking Blue Cross, Cambia halts after resignation

In the wake of Conway’s resignation, Blue Cross announced on Friday that regulatory approval of a long-term cooperation agreement with Oregon’s Cambia Health Solutions was no longer being sought.  The company had announced last Tuesday that it would put on “temporary hold” its previously announced combination with Cambia Health Solutions. The two not-for-profit companies insure more than 6 million people combined in North Carolina, Oregon, Utah, Idaho and Washington.

Washington Insurance Commissioner Mike Kreidler wrote to Cambia’s board last Tuesday admonishing them for failing to tell him about Conway’s arrest until the week before.

“Your behavior in this matter must, and will, be taken into account as my office considers (Cambia’s) request for a merger” with Blue Cross, he wrote.

The deal announced in March called for Conway to also become Cambia’s CEO, but the companies planned to keep their assets and insurance policies separate.

An email to NSJ from Blue Cross spokesman Austin Vevurka stated, “In accordance with the previously announced pause in the Strategic Affiliation process, Cambia Health Solutions and Blue Cross Blue Shield of North Carolina have mutually agreed to withdraw their respective Form A applications for regulatory approval.”

 

The Associated Press contributed to this report.