Cambia Health Solutions and Blue Cross and Blue Shield of North Carolina announced Friday that they have mutually agreed to withdraw their merger applications.
The companies said Tuesday that their boards had decided to temporarily pause efforts to combine operations of the two companies.
The companies made the announcement after news broke that Patrick Conway, the chief executive officer of North Carolina Blue, had been charged with driving under the influence (DUI) of alcohol, after colliding with a delivery truck, in June.
The North Carolina Blue board said in a statement that it had reviewed information about the accident and DUI charges immediately after the accident, but that new details have recently come to light. The board said that it had asked for Conway’s resignation, and that Conway had resigned.
“Despite Dr. Conway’s many successes during his tenure at BlueCross NC, we feel that our constituents are best served by naming an interim CEO and beginning a formal search for a permanent replacement,” the board said in a statement about Conway’s departure.
The company’s board picked Gerald Petkau to be the interim CEO.
Conway said via Twitter that he has been dedicated throughout his career to helping people live longer, happier and better lives through access to affordable health care.
“Today, I am ashamed, embarrassed and sorry about my actions on June 22nd,” he said. “I am especially sorry for the pain I have caused my family, friends and colleagues.”
Conway said that he had disclosed what happened to the North Carolina board and completed 30 days of inpatient substance abuse treatment.
“However, I also understand that I must continue to work hard to earn back the trust that I’ve lost based on my actions,” Conway said.
Patrick Conway’s Background
Conway is a medical doctor who earned a bachelor’s degree from Texas A&M University and a medical degree from the Baylor College of Medicine. He completed a residency in pediatrics at Harvard and earned a master’s degree in health services research and health policy from the University of Pennsylvania’s medical school.
He served as a White House fellow starting in September 2007, under former President George W. Bush, and moved over to serve in the leadership at the U.S. Department of Health and Human Services, and at the Centers for Medicare and Medicaid Services (CMS).
CMS is the arm of HHS that runs Medicare and Medicaid.
Conway served as the acting CMS administrator from January 2017, after former President Barack Obama left office, until Seema Verma was confirmed as President Donald Trump’s CMS administrator.
Cambia and North Carolina Blue
Cambia is the parent of health insurers in Oregon, Washington state, Idaho and Utah that operate under the Regence name. The plans provide or administer health coverage for 2.6 million people.
North Carolina Blue provides coverage for 3.7 million people in its state.
The carriers announced plans to combine their operations in March.
The office of Mike Kreidler, Washington state’s insurance commissioner, reported Tuesday that Kreidler had “admonished Cambia Health Solutions for failure to promptly inform him of an incident involving a top executive at a time when the company is seeking approval of a merger with Blue Cross Blue Shield of North Carolina.”
State law required Cambia to tell him of the DUI charges within two business days after the charges were filed, officials said.
“Your (Cambia’s) behavior in this matter must, and will, be taken into account as my office considers Cambia/Regence’s request for a merger,” Kreidler wrote in a letter to Cambia, officials said.
Cambia and North Carolina Blue have said they have put their affiliation on hold and withdrawn the deal-related applications, but they have not said they have permanently ended efforts to affiliate.
— Read Senate Confirms Seema Verma as CMS Administrator, on ThinkAdvisor.