ANNAPOLIS — The second of many planned reports on the sale ofMaryland health care provider CareFirst may be held up because the groupconducting the study has not yet received all the data it need.
D.C. Appleseed Center, a nonprofit public interest group, isoverseeing a valuation of the sale of CareFirst BlueCross BlueShield to aCalifornia company by Cain Brothers Investment Banking Firm, of New York.
The Appleseed Center said it also needs the terms of a confidentiality statement that Carefirst has asked the group to sign.
“They have not been forthcoming with the data,” said AppleseedExecutive Director Walter Smith.
Complete data has not been given to Appleseed because CareFirst is not confident private information will be used responsibly, said companyspokesman Jeff Valentine.
“We want assurance made that certain proprietary information willremain confidential,” Valentine said.
Blackstone Group, which released its evaluation of the sale Monday,and other organizations agreed to keep certain information confidentialbefore they could obtain all data to complete their reports.
Blackstone concluded that WellPoint Health Network’s $1.3 billionoffer is inadequate. To be purchased by Wellpoint, CareFirst must convertfrom a nonprofit to a for-profit company.
Smith said he could not speculate what price will be suggested in this next study because the data is incomplete. It’s also unclear exactly whenthe report will be completed, although the firm is still shooting for theend of this month, he said.
WellPoint spokesman Ken Farber said the company is cooperating withD.C. Appleseed.
Blackstone’s report determined the merger should cost between $1.35 billion to $2.25 billion.
Blackstone’s results were unsurprising, said Farber.
“This methodology did not include the $35 million to $40 million ayear in premium taxes that would take the value down to $1.1 (billion) to$1.5 (billion) close to our original number,” Farber said. “TheBlackstone report took into account values estimated for two years fromnow. The question is what is the value today?”
WellPoint is facing a Sept. 27 state deadline to decide if the company wants to continue or pull out of the conversion.
Analysis of the merger will continue until Maryland InsuranceCommissioner Steven B. Larsen makes a decision whether to accept it,expected by the end of the year.
“The question that still hasn’t been answered is if this is in thebest interest of Marylanders. I don’t know how converting CareFirst to afor-profit will help benefit the state of Maryland,” said DelegateMichael Busch, D-Anne Arundel, chairman of the General Assembly committeereviewing the proposal.
The merger is of enormous value to the state of Maryland, said Farber.
“We have greater experience in developing products that provide great access to health care, and customer service, including online informationfor our customers.”
Customers would have a choice of different customized policies, accessto online claims information, and research on hospitals and doctors, hesaid.
Maryland was to receive about $850 million in stock from the original deal, but legislation was passed requiring WellPoint to pay in cash, oneof many bills designed to impose lawmakers’ will on the transaction.
“I don’t think it is in the best interest of the state of Maryland tobe a partner in a business that we have to regulate,” said Busch of theoriginal stock deal.
State lawmakers also gave themselves 90 days to review the sale andbarred executives from profiting from the sale.