Blue Cross & Blue Shield of Rhode Island is legally allowed to establish a for-profit “wellness institute” and to offer its services outside the state, but final approval of the plan will depend on the details, Health Insurance Commissioner Christopher F. Koller ruled late last month.
The decision is good news for Blue Cross, which has faced opposition from Attorney General Patrick C. Lynch since it first began talking about the institute last year.v
Blue Cross has a national expert, Michael H. Samuelson, in charge of its health promotion initiatives, and given the growing demand for health and wellness programs, the company had seen an opportunity to make money by making Samuelson’s expertise available not only to Blue Cross subscribers, but to non-subscribers in Rhode Island and out-of-state clients.
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But Lynch questioned the wisdom of the plan. In a news release this summer, he called the proposed “Health and Wellness Institute” a potentially “risky venture,” arguing that it might be illegal, could create a needless financial exposure, could elude state regulation and could allow Blue Cross to restrict access to health care.
Given that Koller’s office oversees Blue Cross, however, Lynch decided to put the matter in his hands, seeking an advisory opinion about the plan’s legality and other matters of concern.
On Nov. 21, Koller ruled that the Blue Cross charter permits the company to establish a wholly owned, for-profit subsidiary to sell wellness and prevention services, but he also ruled that any plans for such an entity would be subject to his approval.
And the Blue Cross plan, as described so far, doesn’t provide enough information to show that it’s consistent with the nonprofit’s mission and charter, Koller said.
“An entity focusing on wellness and the lifestyle choices that promote wellness may be very consistent for Blue Cross,” Koller said in a news release. “But this office will need more information before making that determination.”
Specifically, Koller said Blue Cross would have to submit all the proper paperwork and prove that the institute would be consistent with the company’s “charitable purposes”; that the proposed out-of-state services “will benefit the citizens of Rhode Island”; that the financing of the institute “enhances the solvency of Blue Cross” and contributes to the company’s ability to carry out its mission.
None of that seemed to intimidate Blue Cross officials.
“We’re extremely pleased,” said spokeswoman Kim Keough. “We look forward to working with [Koller] as we move forward with the process.”
Asked whether the notion of out-of-state services benefiting Rhode Islanders could be a challenge, Keough replied that those services would yield a profit, “and the money we make, we’ll be able to turn into R&D and be able to improve our services here.”
Asked how that fit with his position, Koller replied: “I think the standard is intentionally broad, but we would consider indirect benefits. … [But] Blue Cross’ obligation is to its members and the community as a nonprofit. The more directly its activities benefit the community, the more favorably they’ll be looked upon.”
