MA AG cracks down on non-profit health exec compensation

Massachusetts Attorney General Martha Coakley has kicked off a crackdown on the compensation practice of non-profit healthcare organizations, notably compensation received by directors.

While the current investigation is focused on four health plans--Harvard Pilgrim Health Care, Tufts Health Plan, Fallon Health Plan and Blue Cross and Blue Shield of Massachusetts--and some large health systems, Coakley intends to expand the program if initial findings don't look kosher.

The campaign springs from the state's 2007 investigation of governance and compensation at BCBSMA, which drew the department's ire when former CEO and board chair received a large lump sum payment when he retired. The feeling seems to have been that BCBSMA's problems were just the tip of the iceberg.

This time around, one of the key issues attracting the attention of the state AG is the practice of compensating otherwise independent directors at four of the state's eight charitable health plans. "If the practice is to continue at any of them, it should do so only on the basis of a sound and well considered foundation, for which the benefits and risks have been fully explored and appropriately considered, and in a manner in which the independence of the board has been preserved," Coakley wrote in a memorandum on the subject.

As part of its review, the state will begin to demand far more information on director compensation from charitable healthcare organizations, and will expect them to turn it over quickly.

To learn more about the Mass AG's plans:
- read AG Martha Coakley's memorandum (.pdf)