United States. Congress. Senate. Committee on Gove.

Oversight of the insurance industry : Blue Cross/Blue Shield--National Capital Area : hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, first session, January 26-27, 1993 online

. (page 1 of 60)
Online LibraryUnited States. Congress. Senate. Committee on GoveOversight of the insurance industry : Blue Cross/Blue Shield--National Capital Area : hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, first session, January 26-27, 1993 → online text (page 1 of 60)
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S. Hrg. 103-91

OVERSIGHT OF THE INSURANCE INDUSTRY: BLUE
CROSS/BLUE SHIELD— NATION AL CAPITAL AREA

Y 4. G 74/9: S. HRG. 103-91



Oversight of the Insurance Industry.

L




HEARINGS

BEFORE THE

PERMANENT
SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON
GOVERNMENTAL APFAIES
UNITED STATES SENATE

ONE HUNDRED THIRD CONGRESS

FIRST SESSION



JANUARY 26-27, 1993



Printed for the use of the Committee on Governmental Affairs




'Sili v-




'.wuuum;,.



AUG J f 1993






S. Hrg. 103-91

OVERSIGHT OF THE INSURANCE INDUSTRY: BLUE
CROSS/BLUE SHIELD— NATIONAL CAPITAL AREA



HEARINGS

BEFORE THE

PERMANENT
SUBCOMMITTEE ON INVESTIGATIONS

OF THE

COMMITTEE ON
GOVERNMENTAL AFFAIES
UNITED STATES SENATE

ONE HUNDRED THIRD CONGRESS

FIRST SESSION



JANUARY 26-27, 1993



Printed for the use of the Committee on Governmental Affairs




U.S. GOVERNMENT PRINTING OFFICE
63-886= WASHINGTON : 1993



For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office. Washington. DC 20402
ISBN 0-16-041007-X



COMMITTEE ON GOVERNMENTAL AFFAIRS

JOHN GLENN, Ohio, Chairman

SAM NUNN, Georgia WILLIAM V. ROTH, Jr., Delaware

CARL LEVIN, Michigan TED STEVENS, Alaska

JIM SASSER, Tennessee WILLIAM S. COHEN, Maine

DAVID PRYOR, Arkansas THAD COCHRAN, Mississippi

JOSEPH I. LIEBERMAN, Connecticut JOHN McCAIN, Arizona

DANIEL K. AKAKA, Hawaii
BYRON L. DORGAN, North Dakota

Leonard Weiss, Staff Director

Franklin G. Polk, Minority Staff Director and Chief Counsel

Michal Sue Prosser, Chief Clerk



PERMANENT SUBCOMMITTEE ON INVESTIGATIONS

SAM NUNN, Georgia, Chairman
JOHN GLENN, Ohio, Vice Chairman

CARL LEVIN, Michigan WILLIAM V. ROTH, Jr., Delaware

JIM SASSER, Tennessee TED STEVENS, Alaska

DAVID PRYOR, Arkansas WILLIAM S. COHEN, Maine

JOSEPH I. LIEBERMAN, Connecticut THAD COCHRAN, Mississippi

BYRON L. DORGAN, North Dakota JOHN McCAIN, Arizona

Eleanore Hill, Chief Counsel

Daniel F. Rinzel, Chief Counsel to the Minority

Mary D. Robertson, Chief Clerk

(II)



CONTENTS



Opening statements: Page

Senator Nunn 1, 59

Senator Roth 4

Senator Pryor 62

WITNESSES

Tuesday, January 26, 1993

John F. Sopko, Deputy Chief Counsel, Permanent Subcommittee on Investiga-
tions, Committee on Governmental Affairs 6

David B. Buckley, Chief Investigator, Permanent Subcommittee on Investiga-
tions, Committee on Governmental Affairs 8

Grace McPhearson, Investigator, Permanent Subcommittee on Investigations,
Committee on Governmental Affairs 15

Robert M. Willis, Superintendent of Insurance for the District of Columbia 32

Steven T. Foster, Commissioner of Insurance for the Commonwealth of Vir-
ginia and President of the National Association of Insurance Commission-
ers 40

Wednesday, January 27, 1993

Joseph Gamble, former President and Chief Executive Officer, Group Hospi-
talization and Medical Services, Inc 60

Charles P. Duvall, M.D., former Chairman of the Board of Trustees, Group

Hospitalization and Medical Services, Inc 62

Benjamin W. Giuliani, President and Chief Executive Officer, Group Hospital-
ization and Medical Services, Inc 65

Peter F. O'Malley, Chairman of the Board of Trustees, Group Hospitalization
and Medical Services, Inc 101

Alphabetical List of Witnesses

Buckley, David B.:

Testimony 8

Prepared statement with appendices 113

Duvall, Charles P. (M.D.):

Testimony 62

Prepared statement 236

Foster, Steven T.:

Testimony 40

Prepared statement with attachments 228

Gamble, Joseph:

Testimony 60

Giuliani, Benjamin W.:

Testimony 65

Prepared statement with attachments 237

McPhearson, Grace:

Testimony 15

Prepared statement with appendices 113

O'Malley, Peter F.:

Testimony 101

Prepared statement 264

Sopko, John F.:

Testimony 6

Prepared statement with appendices 113

(iii)



IV

Page

Willis, Robert ML:

Testimony 32

Prepared statement 224

APPENDIX

Prepared statements of witnesses in order of appearance 113

Staff Statement 113

Appendices:

Appendix A — Group Hospitalization and Medical Services, Inc. Time Line
Organizational Development Summary 172

Appendix B — Group Hospitalization and Medical Services, Inc. Organiza-
tional Chart provided by GHMSI 173

Appendix C — Group Hospitalization and Medical Services, Inc. Legal Cor-
porate Structure — As of December 1, 1992 provided by GHMSI 174

Appendix D — Chart reflecting Group Hospitalization and Medical Serv-
ices, Inc. Selected Officer Control of Subsidiary Boards 175

Appendix E — Revenue/ Reserve Chart of Group Hospitalization and Medi-
cal Services, Inc 176

Appendix F— Group Hospitalization and Medical Services, Inc. Salaries
and Benefits Chart 177

Appendix G — Expense and itinerary of February/March, 1989 trip to

England, France and Zimbabwe by J. P. Gamble 178

Appendix H — Expense and itinerary of January, 1991 trip to Paris,

France by J. P. Gamble 194

Appendix I — Expense and itinerary of June 1989 Site Inspection trip to
Portugal by D. H. Kestel 196

Appendix J— 1987-1992 Travel Expenses For J. P. Gamble, R. Groppe and
D. H. Kestel 198

Appendix K— 1989-1992 Blue Cross/Blue Shield— National Capital Area
and Group Hospitalization and Medical Services, Inc. Corporate Ac-
count Expenses 213

Appendix L — D. H. Kestel's Itemized Local Golf Charges Submitted as
Local Business Expenses — 1988-1992 214

Appendix M — Cost of Group Hospitalization and Medical Services, Inc.
Sponsored Events 217

Appendix N — Group Hospitalization and Medical Services, Inc. Board of

Trustees Compensation— 1988-1991 223

Exhibit List:

1. a. Congressional Charter for Group Hospitalization and Medical Serv-

ices, Incorporated (GHMSI), as amended October 17, 1984 *

b. Certificate of Incorporation of Group Hospitalization, Incorporated,
dated November 18, 1933, and Certificate of Incorporation of Medical
Service of the District of Columbia, dated September 30, 1946 *

c. Minutes of the Meeting, Board of Trustees, Group Hospitalization,
Incorporated, dated August 21, October 20 and October 27, 1939

d. Hearing before the Subcommittee on Fiscal Affairs & Health and the
Committee on the District of Columbia, House of Representatives,
dated August 8, 1984, regarding Amendment of Federal Charter of
Group Hospitalization, Inc

e. Public Law 102-382, District of Columbia 1992 Supplemental Appro-
priations and Rescissions and 1993 Appropriations, amending the
Congressional Charter for Group Hospitalization and Medical Serv-
ices, Incorporated *

2. Minutes of the Special Meeting of the Board of Trustees of Group

Hospitalization and Medical Services, Inc., dated October 20, 1992,
regarding Blue Cross and Blue Shield National Association's charac-
terization of Blue Cross and Blue Shield of the National Capital
Area's Reserves *

3. a. Statement for the Record of John A. Donaho, Maryland State Insur-

ance Commissioner 267

b. State of Maryland House Bill 238 referred to in Commissioner Dona-
ho's Statement for the Record *

4. GHMSI Internal Audit Report of Blue Cross of Jamaica, dated Decem-

ber 31, 1990



»



*



Page

5. a. Complaint, U.S. ex rel. Susan E. Hollrith v. National Capital Admin-

istrative Services, Inc. and Blue Cross/Blue Shield of the National
Capital Area, No. 91-1691-A Civ. (E.D.Va November 15, 1991)

b. Hollrith Disclosure Statement, Id

c. Settlement Agreement (October 21, 1992), Id

d. Hollrith narrative of facts, Id

6. SEALED EXHIBIT: United States Agency for International Develop-

ment, Office of the Inspector General, Report of Investigation of
National Capital Administrative Services, dated February 12, 1993

7. GHMSI Internal Audit Report of Protocol, Incorporated, dated August

29, 1991

8. Materials relating to contractual agreement between B'nai B'rith and

Protocol, Inc. and GHMSI, dated 1990

9. U.S. Department of Health and Human Services, Health Care Financ-

ing Administration, Medicare Annual Contractor Evaluation Report
for Blue Cross and Blue Shield of the National Capital Area, for the
period October 1, 1985 through September 30, 1986, dated February
13, 1987

10. Meeting Minutes of the Board of Trustees of Group Hospitalization and

Medical Services, Inc., dated May 6, 1990, regarding Joseph P.
Gamble informing the Board of the reasons for GHMSI withdrawal
from Medicaid business

11. Charts prepared by the Permanent Subcommittee on Investigations

regarding travel itinerary of Joseph P. Gamble for the years 1988
through 1990 270

12. GHMSI Travel Expense Reports of Joseph P. Gamble for travel to

China, England, France, Zimbabwe, Ireland and Hong Kong

13. Photograph of Retirement Collage presented to Joseph P. Gamble by

GHMSI

14. Letter to Senator Sam Nunn, Chairman, Permanent Subcommittee on

Investigations, dated January 22, 1993, from Edgar Lawrence, Execu-
tive Vice President, Maryland Hospital Association, regarding Perma-
nent Subcommittee on Investigations' inquiry of Blue Cross and Blue
Shield Plans 273

15. Examination Report of Group Hospitalization and Medical Services, Inc.

as of December 31, 1991, conducted by Virginia Bureau of Insurance,
dated February 10, 1993

16. Consent Order, Commonwealth of Virginia v. Group Hospitalization and

Medical Services, Inc., dated August 3, 1992, regarding transactions
with affiliates and other matters

17. Information pertaining to real estate held by GHMSI:

a. Chart prepared by the Senate Permanent Subcommittee on Investiga-
tions entitled, "Relationship of Real Estate to Statuary Reserve and
Unassigned Funds" 276

b. Real Estate Appraisal prepared by GA/Partners, a Unit of the
Arthur Andersen and Company Real Estate Services Group, Valu-
ation at September 1, 1989, Blue Cross and Blue Shield Office Build-
ing, Washington, D.C., dated September 8, 1989

c. Real Estate Appraisal prepared by Arthur Andersen Real Estate
Services Group, Valuation at April 1, 1992, Blue Cross and Blue
Shield Office Building, Washington, D.C., dated April 1, 1992

18. Letter to Benjamin W. Giuliani, President and Chief Executive Officer,

Group Hospitalization and Medical Services, Incorporated, dated No-
vember 8, 1991, from Preston Jordan, Blue Cross and Blue Shield
Association, regarding problems with GHMSI's financial reporting to
BCBSA

19. GHMSI 1993 Business Plan, dated January 4, 1993

20. Minutes of the Meeting of the Board of Trustees, Blue Cross and Blue

Shield of the National Capital Area, dated March 8, 1988, regarding
concerns held by Peter F. O'Malley concerning lines of credit, prior
year projections, and financial results of various subsidiaries 277

21. Group Hospitalization and Medical Services, Incorporated, consolidation

schedules dated 1985 through 1991 *

22. Group Hospitalization and Medical Services, Incorporated Reports and

Financial Statements for the years 1982 through 1991

23. Group Hospitalization and Medical Services, Incorporated Management,

Internal Control and Recommendation Letters, 1982 through 1991



«



*



VI

Page

24. Letter to Joseph Gamble, dated September 6, 1989, from Thomas W.

Walsh, Price Waterhouse, regarding Status of Subsidiary Financing
Requirement Study *

25. Maryland Department of Licensing and Regulation, Insurance Division,

Report on Examination as of December 31, 1987, of Group Hospitali-
zation and Medical Services, Inc *

26. Virginia State Corporation Commission, Bureau of Insurance, Analysis

of Excess Capital and Surplus Investments of Group Hospitalization

and Medical Services, Inc., as of September 30, 1992 *

27. Annual Statements of Group Hospitalization and Medical Services, In-

corporated for the years 1984, 1985, 1988, 1989, 1990, and 1991

28. Quarterly Statement of Group Hospitalization and Medical Services,

Inc., as of September 30, 1992

29. Group Hospitalization and Medical Services, Incorporated Internal

Audit Reports for:

a. FLEXX Processing System; *

b. Protocol, Inc.; *

c. Health Management Strategies International, Inc.; *

d. Purchasing; *

e. Paperless Claims; *

f. Virgin Islands Claims Processing Center; *

g. Employee Access to Employee Claims Information; *

h. CapitalCare; *

i. Other Party Liability (OPL);

j. Building Improvements, Renovations and Space Planning; *

k. Inter Plan Date Reporting (IPDR); *

1. Telecommunications; *

m. Professional Account Checks Outstanding over Six Months; *

n. Addendum: Professional Account Checks Outstanding Over Six

Months; *

o. First Continental Life Special Review; *

p. National Capital Administrative Services (NCAS), Inc *

q. Claims Override; *

r. Refund Inventory Control System (RICS); *

s. Home/Host Special Project; *

t. Special Review of CapitalCare; *

u. Plan Services, Inc. (PSD; *

v. Travel and Entertainment Expense; *

w. PCS, Medco and Americas Pharmacy; *

x. Broker Commissions; *

y. Contracts; *

z. Health Management Strategies, Inc. (GHMSI); *

aa. Foreign Currency Conversion; *

bb. Emtrust Reinsurance; *

cc. Group and Provider Access to BCBSNCA System Files *

30. Reinsurance Contracts for Group Hospitalization and Medical Services,

Incorporated and its subsidiaries:

a. Group Hospitalization and Medical Services, Inc *

b. EMTRUST

c. Protocol/B'Nai B'rith

d. National Capital Reinsurance Company, Incorporated *

e. BCS Life Insurance Company *

f. International Health Benefits (Ireland, Limited) 309

g. Latin American /South American Contracts *

h. International Health Benefits, SA. (Paris) *

31. Order and Memorandum Opinion, Group Hospitalization and Medical

Services, Inc., et ah, v. Blue Cross and Blue Shield of Virginia, et ai,
No. 85-1123-A Civ. (E.D. of Va April 8, 1986)

32. Kenkel, "The Week In Healthcare-Blue Cross/Blue Shield- Delayed deal

aided by $15 'note'," Modern Healthcare, (December 14, 1992)

33. Greenberg, "Fewer insurers can improve competition," Business &

Health (December 1992)

34. a. SEALED EXHIBIT: Blue Cross and Blue Shield Association Member-

ship Letters for Blue Cross and Blue Shield of the National Capital
Area for the period 1986 through 1991



*



Vll

Page

Exhibit List — Continued

b. SEALED EXHIBIT: Blue Cross and Blue Shield Association Plan
Profiles for Blue Cross and Blue Shield of the National Capital Area
for the period December 1986 through August 1992

35. a. List of Trustees, Directors and Officers of Group Hospitalization and

Medical Services, Incorporated and its subsidiaries, as of May 31, 1992 312

b. List of changes in Trustees, Directors and Officers of Group Hospitali-
zation and Medical Services, Incorporated and its subsidiaries for the
years 1988 through 1992, as of May 31, 1992 *

c. List of Board of Trustees and Board of Directors for Group Hospitali-
zation and Medical Services, Inc. and its subsidiaries

36. Group Hospitalization and Medical Services, Incorporated Review of

International Division Operations, dated March 4, 1992

37. Six Memoranda from M. P. Sheehan, dated June 1989 through April

1992, to GHMSI Senior Management Team, regarding GHMSI corpo-
rate strategy

38. Chart prepared by GHMSI identifying officers of GHMSI and its sub-

sidiaries who retired, separated, or were fired between 1988 and 1992..

39. Memorandum to All GHMSI Employees, dated August 14, 1992, from

Ben Giuliani, regarding "Senate Hearings and News Reports Con-
cerning Blue Cross and Blue Shield Plans" 370

40. Memorandum to GMHSI Board of Trustees, dated October 23, 1992,

from J. P. Gamble, regarding pending retirement and course of action

for GHMSI 375

41. Report by Center for National Health Program Studies, "The Growing

Epidemic of Uninsurance: New Data on the Health Insurance Cover-
age of Americans," dated December 16, 1992

42. Exhibits 1, 3, 4, 7 and 8 from McKinsey & Company, Inc. Report on a

review, assessment and recommendations for GHMSI, dated April
through October 1992

43. a. Meeting Minutes of the Board of Trustees of Group Hospitalization,

Incorporated, dated May 20, 1983, regarding acquisition of World
Access, Inc. and merger with Medical Services of the District of
Columbia and other matters 378

b. Meeting Minutes of the Board of Trustees of Blue Cross and Blue
Shield of the National Capital Area, dated March 10, 1987, regarding
the Medicare Part A contract, Board fees and other matters

c. Meeting Minutes of the Board of Trustees of Blue Cross and Blue
Shield of the National Capital Area, dated July 14, 1987, regarding
Blue Cross of Jamaica and other matters 391

d. Meeting Minutes of the Board of Trustees of Group Hospitalization
and Medical Services, Incorporated, dated July 14, 1992, regarding the
NCAS contract with the Agency for International Development and
other matters 421

e. Meeting Minutes of the Executive Committee of Group Hospitaliza-
tion and Medical Services, Incorporated, dated, July 16, 1992, regard-
ing Health Management Strategies, International and compensation
for E. Seton Shields and other matters

f. Meeting Minutes of the Board of Trustees of Blue Cross and Blue
Shield of the National Capital Area, dated, July 16, 1992, regarding
financial projections, investments and other matters

g. Meeting Minutes of Special Meeting of the Board of Trustees of
Group Hospitalization and Medical Services, Incorporated, dated
August 3, 1992, regarding Consent Order with Virginia Department of
Insurance and other matters

h. Meeting Meetings of the Chairman's Special Task Force for Board
Constitution of Group Hospitalization and Medical Services, Incorpo-
rated, held by telephone, dated August 18, 1992, regarding appoint-
ment of Peter J. O'Malley as Chairman of the Board and other
matters

i. Meeting Minutes of the Board of Trustees of Group Hospitalization
and Medical Services, Incorporated, dated September 8, 1992, regard-
ing resignation of Joseph P. Gamble from the Board and other mat-
ters

j. Meeting Minutes of the Board of Trustees of Blue Cross and Blue
Shield of the National Capital Area, dated September 10, 1992, re-
garding financial projections and other matters



Vlll

Page

Exhibit List — Continued

k. Meeting Minutes of the Special Meeting of the Board of Trustees of
Group Hospitalization and Medical Services, Incorporated, dated Oc-
tober 26, 1992, regarding affiliation with another Plan and other
matters *

44. SEALED EXHIBIT: Correspondence between GHMSI and Blue Cross

and Blue Shield of Virginia, dated October and November 1992, re-
garding affiliation of Blue Cross and Blue Shield of Virginia with
GHMSI

45. National Center For Nonprofit Board Booklets:

a. "Ten Basic Responsibilities of Nonprofit Boards" *

b. "The Legal Obligations of Nonprofit Boards: A Guidebook for Board
Members" *

46. Letter to Joseph P. Gamble, President, GHMSI, dated February 13,

1987, from Louis B. Hayes, Associate Administrator for Operations,
Department of Health and Human Services, regarding Nonrenewal of
Medicare Part A Contract between GHMSI and HHS

47. Letter to Harry P. Cain, II, Senior Vice President, Federal Programs,

FEP Directors Office, Blue Cross and Blue Shield of the National
Capital Area, dated February 25, 1987, from Richard A. Cook, Vice
President, Legal & Legislative Affairs, Blue Cross and Blue Shield of
the National Capital Area, regarding Petition for Reconsideration and
Reversal of Decision for Nonrenewal of Medicare Part A Contract
between GHMSI and HHS

48. Letter to Thomas C. Fox, Esquire, Pierson, Ball & Dowd, dated May 5,

1987, from Secretary of Health & Human Services Otis R. Bowen,
M.D., regarding legal review of response to the GHMSI Petition for
Reversal of HHS decision of nonrenewal of Medicare Part A Contract.

49. Settlement Agreement, Group Hospitalization and Medical Services,

Inc. v. Dr. Otis R. Bowen, et al. and Blue Cross and Blue Shield
Association v. Dr. Otis R. Bowen, et al., No. 87-1096 Civ. and No. 87-
1130 Civ. (U.S.D.C. Dist. Columbia June 12, 1987)

50. Public Announcement released jointly by Health Care Financing Ad-

ministration, Blue Cross and Blue Shield of the National Capital Area
and Blue Cross and Blue Shield Association, dated June 1987, regard-
ing Blue Cross and Blue Shield of the National Capital Area with-
drawal from Medicare Part A *

51. Abramowitz, "Blue Cross, Medicare Terminate Contract," Washington

Post, (July 4, 1987)

52. Miscellaneous documents regarding BCBSNCA withdrawal of the Medi-

care Part A Contract *

53. United States Office of Personnel Management, Office of the Inspector

General, Final Audit Report on Blue Cross and Blue Shield of the
National Capital Area dated June 24, 1992

54. Listing of Blue Cross and Blue Shield of the National Capital Area,

Office of Personnel Management National Contract, Paid Claims Dol-
lars and Administrative Expenses Paid (1980-1992)

55. Letter to Gene Richardson, Permanent Subcommittee on Investigations,

dated January 15, 1993, from James M. McGee, National President,
National Alliance of Postal and Federal Employees, regarding admin-
istrative expenses and service charge paid to Blue Cross and Blue
Shield of the National Capital Area 460

56. Letter to Gene Richardson, Permanent Subcommittee on Investigations,

dated January 15, 1993, from James M. McGee, National President,
National Alliance of Postal and Federal Employees, regarding rela-
tionship between Blue Cross and Blue Shield of the National Capital
Area and the Alliance Health Benefit Plan 461

57. Supplemental Executive Benefit Plan Check Requisition Form for

Wright B. Poffenberger, in the amount of $1,015 for Cabin John
Tennis Club Dues and Family Out-of-Pocket Medical Expenses, dated
November 29, 1990

58. Blue Cross and Blue Shield Check, in the amount of $542.58, to Mary K.

Craddock, M.D., dated September 17, 1992, returned for insufficient
funds 463

59. Letter to John F. Sopko, Permanent Subcommittee on Investigations,

dated December 18, 1992, from Diane Jones, Executive Director, Vir-
ginia Gold Cup Association, regarding Protocol corporate sponsorship . 464



»



IX

Page

60. Heath and Crenshaw, "Insurance Firms Pick Up Tab for Regulators'

Events," Washington Post, (December 14, 1992)

61. Information provided by GHMSI on gifts, donations, and gratuities to

regulators and legislators

62. Listing of GHMSI Directors and Officers Compensation for 1991 466

63. Towers Perrin studies for Blue Cross and Blue Shield of the National

Capital Area, Group Hospitalization and Medical Services, Inc., and
Health Management Strategies entitled:

a. "BCBSNCA. Report on CEO Pay Practices. Prepared for Decision
Assistance and Data for GHMSI's CEO and Board Members," dated
October 1989

b. "GHMSI. Organization Design and Succession Planning. Discussion
Paper for GHMSI Long-Term Planning Committee," dated December

11 1989 *

c. "HMS (A GHMSI Subsidiary). President and Chief Executive Officer.
Competitive Marketplace Compensation Data," dated September 14,
1990

d. "Group Hospitalization and Medical Services (GHMSI). 1991 Execu-
tive Compensation Study for GHMSI Subsidiary Presidents/CEOs,"
dated December 5, 1990

e. "Group Hospitalization and Medical Services (GHMSI). 1991 Execu-
tive Compensation Study for GHMSI. Vice President, Marketing and
Vice President, Network Development Positions," dated December 19,
1990

64. "Group Hospitalization and Medical Services, Inc., Executive Compensa-

tion Review, Preliminary Report," prepared by William H. Mercer,
Inc., March 27, 1991

65. Listing of compensation for officers of GHMSI and its subsidiaries for

the period 1988 to 1991 including base compensation, incentive
awards, executive fringe benefits, total compensation, flexible spend-
ing account, W-2 total, employee thrift plan, and employer thrift
plan. Officers include: Blosse, Brown, Cook, Cunningham, Ecker, Edel-
stein, Gamble, Giuliani, Groppe, Pace, Kleh, Kongstvedt, Kestel,
Long, Morris, Waller, Poffenberger, Riley, Shields and Johnson

66. Listing entitled, "Additional Benefits for GHMSI Corporate Officer/

Directors," undated regarding standard officer benefits, optional offi-
cer benefits, supplemental pension benefits, and other perquisites 467

67. GHMSI "Leadership Conference Data" for the period 1987 to 1992

describing the location, dates, costs, sales reported participants for
each trip 470

68. "GHMSI & Subsidiaries' Club Memberships 1988-1992" 481

69. Letter to John F. Forbes, Senate Permanent Subcommittee on Investi-

gations, dated November 24, 1992, from John Nicholas, Club Manag-
er, City Club of Washington, regarding GHMSI and subsidiary em-



Online LibraryUnited States. Congress. Senate. Committee on GoveOversight of the insurance industry : Blue Cross/Blue Shield--National Capital Area : hearings before the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs, United States Senate, One Hundred Third Congress, first session, January 26-27, 1993 → online text (page 1 of 60)