Blue Cross CEO Conway took 30-day leave privately; N.C. insurance commissioner slams board

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Patrick Conway, Blue Cross Blue Shield of North Carolina CEO, went on a temporary leave following his June arrest in Randolph County for driving while impaired, but has returned to the the company’s helm, the Durham-based insurance company said Monday.

Patrick ConwayBlue Cross and Blue Shield of North Carolina

Conway was involved in a crash with a truck on Interstate 85 on June 22 and faces charges of driving while impaired and two charges of misdemeanor child abuse because his two daughters, both minors, were with him in the car at the time. He refused a breathalyzer test at the scene of the accident.

After Business North Carolina broke the news of Conway’s arrest last week, Blue Cross responded to an inquiry saying Conway immediately notified the company’s board of his arrest. After assembling a committee to review the incident, Blue Cross determined he would stay on as CEO.

That didn’t satisfy N.C. Department of Insurance Commissioner Mike Causey, who sent a letter to the Blue Cross Board of Trustees, calling the charges “disturbing” and advising that they appoint an interim CEO until the charges are addressed in court.

“With health insurance being a top issue in our nation and our state, North Carolina consumers need to have utmost confidence in their leaders at this critical time,” Causey wrote.

Causey’s letter prompted a meeting Monday morning with three Blue Cross trustees: First Citizens Bancshares CEO Frank Holding Jr., who chairs the board; Mount Olive Pickle Co. Executive Chairman Bill Bryan; and Charlotte real estate investor Ned Curran of Northwood Office, Causey said. State Treasurer Dale Folwell also attended the meeting at Causey’s invitation.

In a letter released Monday, Blue Cross said it had kept the matter under wraps for the sake of Conway’s privacy, due process and not to interfere with an ongoing investigation. The board and Conway mutually agreed he would undergo a professional substance abuse assessment and attend a 30-day in-patient treatment program. During that time, Chief Operating Officer Gerald Petkau was designated interim CEO, in line with the company’s succession plan. Petkau’s promotion was not publicly reported.

“Based on detailed information shared by the facility concerning Dr. Conway’s assessment and treatment, the Board was satisfied that Dr. Conway could continue to provide strong leadership to Blue Cross NC,” Holding wrote in the letter.

The Blue Cross board will continue to stay in contact with Conway and the company’s leadership team and monitor the legal case as it continues, Holding Jr. says in his letter to Causey. “We believe the Board has taken appropriate steps to handle this sensitive matter in a manner consistent with the privacy and legal issues at, as well as the Board’s fiduciary obligations to Blue Cross NC.”

In an interview Monday night, Causey says he was “shocked” that Blue Cross leaders didn’t acknowledge the incident until the Business North Carolina report. After the news broke, Conway called the insurance commissioner and “was very humble and apologetic,” Causey said.

In his meeting with trustees Monday, Causey said he told them that “I was disappointed in how the corporation handled the incident. Someone should have called me,” he says. “I expect boards to be much more transparent and accountable. I can’t understand their thought process.”

Causey said he repeated his view that the Blue Cross board should name an interim CEO until Conway’s legal issues are resolved.

Withholding information about the incident was particularly surprising given that Blue Cross Blue Shield is trying to complete a massive merger with Oregon’s Cambia Health Solutions, which the N.C. Department of Insurance has been studying since January, Causey said. The combination would lead to a partnership between N.C. Blue Cross, which has about $10 billion in annual revenue, with Cambia, which has more than $6 billion. Conway is slated to head the combined group.

“If you aren’t going to disclose a DWI, how should we expect to trust what we get from the company related to this consolidation,” Causey said. “To me, it was a breach of trust.”

While Causey says the department’s work on the Cambia combination is going well, he says, “We have some questions and the answers haven’t been given as promptly as we would like.” His goal is to protect N.C. Blue Cross policyholders to make sure the partnership does not harm their interests, he adds.

During Monday’s meeting, Causey says he learned that the three board members did not have the whole story about Conway’s actions on June 22. “They did not know all the details that happened. That was clear to me,” he said.

The Wall Street Journal  reported Monday that officers noted when Conway was handcuffed and taken to jail for arrest, he was “absolutely belligerent” and was yelling, crying, swearing at officers and himself and allegedly “had to be shackled to deter him from kicking the holding door.”

Witnesses told the WSJ they saw Conway driving erratically for “more than 4 miles” and a video showed his SUV weaving across multiple lanes before hitting the tractor trailer.

“You had a well-regarded pediatrician who does great things in the community, including volunteering at the hospital, but when something like this happens, it dissolves a lot of goodwill,” Causey says.

“We are so lucky no one was hurt or killed in this incident.”

Conway’s next court date is scheduled for Oct. 8 at the Randolph County courthouse in Asheboro.

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