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4 top executives out at Blue Cross & Blue Shield

04:30 PM EST on Wednesday, December 12, 2007

By Mike Stanton
Journal staff writer

There’s been a purge at Blue Cross & Blue Shield of Rhode Island.

Four top executives are out – and a company spokeswoman refuses to say whether it’s connected to Operation Dollar Bill, the long-running federal corruption probe that has focused in part on the Rhode Island General Assembly’s ties to the state’s dominant health insurer.

The spokeswoman, Kim Keough, did confirm the departure yesterday of executives Lynne Urbani, Matthew T. Brannigan, Scott A. Fraser and Brian Jordan.

Urbani, who joined Blue Cross in 1986, was senior vice president of external services – a new title that she received just a few months ago.

Brannigan, hired in 1996, was senior vice president for sales and marketing.

Fraser, who joined Blue Cross in 1984, was vice president for government relations. Jordan, hired in 1986, was assistant vice president for government relations, joining Fraser as a longtime lobbyist at the State House.

After the corruption case became public four years ago, two other Blue Cross leaders left – Blue Cross president Ronald A. Battista and Thomas Lynch, a former state senator who was Blue Cross’s vice president for legislative affairs.

A spokesman for U.S. Atty. Robert Clark Corrente declined to comment on the departures, or what it might mean in terms of forthcoming developments in the case.

Operation Dollar Bill, a wide-ranging corruption case involving at least seven politicians and seven corporations, began late in 2003, following a Providence Journal story that questioned the ties between Blue Cross and John A. Celona, a powerful state senator who oversaw health-care legislation.

Blue Cross helped finance a cable access television show on health care that was co-hosted by Celona.

The investigation quickly expanded to Celona's role as a paid consultant for the CVS drugstore chain and Roger Williams Medical Center. Celona pleaded guilty to selling his office, agreed to cooperate with the government and is currently in prison.

Another focus of the probe has been the financial ties between the former Senate president, William Irons, an insurance broker, and Blue Cross and CVS. And last month, another political figure, ex-House Majority Leader Gerard Martineau, pleaded guilty to selling his office to CVS and Blue Cross in exchange for hundreds of thousands of dollars of plastic and paper bag contracts.

According to the court papers, Martineau initially solicited the Blue Cross bag business from a Blue Cross lobbyist at the State House. According to people familiar with the investigation, Fraser was the lobbyist, who then referred Martineau to someone else at Blue Cross ``to facilitate the formation of a business relationship.’’

Urbani’s name surfaced during a previous corruption trial. Battista testified that it may have been Urbani, who negotiated reimbursement rates with hospitals, who informed him of a State House meeting involving Battista, Celona and Roger Williams Medical Center president Robert Urciuoli to discuss the hospital’s efforts to increase its payments from Blue Cross.

Last year, Urciuoli and another former hospital executive were convicted of hiring Celona to use his political clout, including helping pressure Blue Cross to increase its reimbursements to the hospital. Their convictions are under appeal.

Brannigan’s name surfaced in a 2004 Journal story regarding Irons and hundreds of thousands of dollars in insurance commissions that Irons received on a Blue Cross health-insurance policy for employees of CVS in Rhode Island.

The Blue Cross sales executive who negotiated the policy said that he questioned paying Irons a commission, because Irons, an insurance salesman, hadn’t done any work on the policy. The sales executive said that Brannigan, his boss, initially agreed, then told him later that Blue Cross would pay Irons.

CVS and Blue Cross declined to comment at the time, citing the ongoing investigation, and Blue Cross refused to let Brannigan talk to The Journal. Both companies joined Irons in asserting that there was nothing inappropriate about the arrangement; Irons’ lawyer said that the commissions were for Irons’s work servicing the account.

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