RELATED ARTICLE• Salaries at the top10 FOR-PROFITS UNDER BLUECROSS UMBRELLAA dozen identities are owned and operated by BlueCross BlueShield of Tennessee, including 10 for-profit businesses.• BlueCross BlueShield of Tennessee Inc.: Formed in 1945, BlueCross is Tennessee’s largest health insurance provider and is organized as a not-for-profit mutual benefit corporation. The Tennessee BlueCross plan is one of 39 independent licensees of the BlueCross BlueShield Association.• Southern Health Plan Inc.: Incorporated in September 2003, the Southern Health Plan is a not-for-profit, social welfare organization that acts as a charitable foundation. Operating under the name of BlueCross BlueShield of Tennessee’s Community Trust, the foundation contributed $573,000 to more than 150 charitable organizations last year.• Tennessee Health Foundation Inc.: Also begun in September 2003, THF is a not-for-profit public benefit corporation that is licensed as a charitable foundation. In 2010, the foundation distributed $4.3 million in charitable gifts.• BeneVive Inc.: Founded in 2006, BeneVive is a for-profit, wholly owned holding company of BlueCross and holds the stock and appoints directors for five for-profit businesses: Online Health, Shared Health, RiverTrust Solutions, Security Care and Riverbend Government Benefits Administrator.• Onlife Health Inc.: This for-profit business operates as Gordian Health Solutions Inc., and is headquartered in Franklin, Tenn. Founded in 1996, the company is a national personal health coaching company that serves many businesses, including other insurers.• Shared Health Inc.: Incorporated in April 2005, Shared Health is a for-profit business created to work on electronic health records and other health care technology infrastructure. The business works with patients, doctors, employers and insurers to improve quality and efficiency by communicating vital medical information through a single secure online source.• RiverTrust Solutions Inc.: Started in December 2003, this for-profit business contracts with the federal government for Medicare and Medicaid services, including durable medical equipment appeals, pharmacy and equipment audits in New Jersey and acute care services reviews.• Security Care Inc.: Incorporated in July 2004, Security Care is a for-profit business to partner with government and businesses for fraud prevention, detection and investigation.• Riverbend Government Benefits Administrator Inc.: Incorporated in October 2002, this for-profit business helps BlueCross provide Medicare services.• Southern Diversified Business Services Inc.: Started in July 1982, this for-profit holding company holds the stock on Volunteer State Health Plan Inc., Group Insurance Services Inc., and Golden Security Insurance Co. Inc.• Volunteer State Health Plan Inc.: Incorporated in 1996, the plan is a licensed health maintenance organization and provides TennCare services, including managed care organizations, and other services to BlueCross.• Group Insurance Services Inc.: Incorporated in 1964, this for-profit business acts as a broker to provide stop-loss insurance, group life insurance, voluntary employee benefit products and other insurance products.• Golden Security Insurance Co. Inc.: Incorporated in 1982, this is a for-profit business licensed as a shell insurance company in Tennessee, Alabama, Arkansas, Texas, Mississippi and Louisiana. It currently is not conducting any business.Source: BlueCross BlueShield of TennesseeBLUECROSS BOARD MEMBERS AND THEIR PAYThe BlueCross board comprises between 11 and 17 members who serve three-year terms and meet at least four times a year. In 2010, the 13 board members collectively were paid more than $1.02 million by BlueCross.• Lamar Partridge, chairman of VMI Holdings LLC in Chattanooga, has been chairman of the BlueCross board since 2009. 2010 pay: $100,000• Betty W. DeVinney, a retired executive for Tennessee Eastman in Kingsport, is vice chairman of the BlueCross board. 2010 pay: $90,000.• Hulet Chaney, CEO emeritus of Tennessee Farmers Insurance Co. in Knoxville. 2010 pay: $75,000• Gus B. Denton, a retired executive for SunTrust Bank from Memphis. 2010 pay: $80,000• DeWitt Ezell, a retired executive for BellSouth from Brentwood, Tenn. 2010 pay: $75,000• Herb Hilliard, an executive of First Tennessee Bank in Memphis. 2010 pay: $90,000• James M. Phillips, managing partner of Pinnacle Investments in Memphis. 2010 pay: $75,000• Gloria S. Ray, director of the Knoxville Tourism and Sports Corp. 2010 pay: $90,000• Emily J. Reynolds, senior vice president for the Tennessee Valley Authority in Nashville. 2010 pay: $75,000• Paul E. Stanton Jr., M.D., president of East Tennessee State University. 2010 pay: $75,000.• Scott Wallace, a visiting professor from the Darden School of Business at the University of Virginia. 2010 pay: $90,000.• John F. Germ, president of Campbell & Associates Inc., in Chattanooga. 2010 pay: $26,666.64 before he left the board.• William Gracey, chief operating officer with LifePoint Hospitals and HCA president of the MidSouth region before joining BlueCross as president last year. 2010 pay for his board service: $75,000Source: BlueCross BlueShield of Tennessee payments for BlueCross and subsidiary retainers in calendar 2010COMPANY AT A GLANCEName: BlueCross BlueShield of TennesseeFounded: 1945Headquarters: ChattanoogaStaff: 5,330 employees, including 4,539 in ChattanoogaRevenues: $5.2 billion in 2010Members: 3.1 millionAnnual claims: More than 65 million
BlueCross BlueShield of Tennessee doubled what it pays its directors and chief executive officer in the past five years, boosting the salary for part-time board Chairman Lamar Partridge to $100,000 and raising the compensation package for CEO Vicky Gregg to more than $4.4 million.
BlueCross officials insist the bigger paychecks to those in the boardroom reflect the growing size and complexity of managing Tennessee’s biggest health insurer. The Chattanooga-based company covers more than 3 million people and runs a dozen subsidiary businesses and foundations – both for profit and for charity.
Critics, however, object to the pay hikes for those running a nonprofit company that has raised its average premiums by more than triple the inflation rate since 2005.
“When the rest of the country is hurting and struggling to keep a roof over their heads and food on the table, the amount of compensation that is being paid to directors and the CEO at BlueCross BlueShield is just absolutely absurd,” said Tony Garr, deputy director of the Tennessee Health Care Campaign, a Nashville-based group that supports health care reform.