D.C. begins legal offensive against health care charity
By: Bill Myers and Michael Neibauer
June 25, 2008
WASHINGTON — The District of Columbia opened a two-front war against a health care charity Tuesday that city officials say is raking in the cash while Washingtonians are languishing without insurance.
CareFirst is a congressionally chartered charity that is supposed to help the poor and uninsured. D.C. officials and health care advocates have been appalled as CareFirst raised its rates and built up a $770 million surplus even as it opted out of a universal health program for city residents.
On Tuesday, a D.C. Council committee took the extraordinary step of granting subpoena power for a legislative investigation of CareFirst’s management.
"We have a problem that requires attention," said Councilwoman and law professor Mary Cheh, D-Ward 3, who will lead the investigation. "On its face, you can’t have their rising rates and compensation as well as a three-quarter-of-a-billion-dollar surplus."
The committee vote came within moments of acting Attorney General Peter Nickles filing a lawsuit against CareFirst. The lawsuit asks the court to order CareFirst to focus on charity rather than profits.
CareFirst issued a statement Tuesday saying that it was "disappointed" by the city’s double-barreled attack.
"We are confident that any reasonable review will find that CareFirst meets its obligations both to its members and the communities we serve," the company’s statement said.
The moves brought cheers from anti-poverty advocates such as Walter Smith of the D.C. Appleseed Center.
"This is a company that is essentially owned by the public," Smith said. "We’ve thought for several years that it was important to hold the company responsible."
Cheh and Health Committee Chairman David Catania, I-at large, have both called for legislation requiring CareFirst to reinvest some of its profits in low-cost health insurance.
"This company has taken a frolic and detour in its mission," Catania said.
D.C. has been a health care wasteland for decades. Its AIDS and tuberculosis rates rival Third World countries, and its grinding — and growing — poverty are leaving an increasing number of Washingtonians to sicken in squalor.
bmyers@dcexaminer.com
mneibauer@dcexaminer.com
