• Capitol Beat
    June 06,2010
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    MONTPELIER – Although his retirement payout was deemed illegal by the state, former Blue Cross Blue Shield of Vermont CEO William Milnes is keeping the more than $7 million he was paid nearly two years ago.

    Vermont officials investigated the compensation and found that he was overpaid by more than $3 million. Blue Cross Blue Shield of Vermont tried to get the money back from Milnes, but his attorney told them he would not give it up voluntarily.

    Milnes, who is now retired in Florida, came to Blue Cross Blue Shield of Vermont more than 10 years ago when the small insurance company was bordering on bankruptcy. He's credited with breathing new financial life into the company.

    But an investigation by the Vermont Department of Banking, Insurance, Securities, Health Care Administration found that between 2005 and 2007 Milne's annual salary from the company was 50 percent higher than those at comparable insurance companies in other states.

    Milnes' excessively high salary — $883,000 in his final year plus the $6.4 million retirement package – is at odds with the public image he had while working in Vermont over the last decade.

    Throughout his tenure, Milnes portrayed himself as a tough businessman who brought Blue Cross Blue Shield's financial house in order. He started a charity to buy winter clothes for poor children. He was showered with awards from the state government – including from Gov. James Douglas.

    "Part of my mission is to put health care into the context of how we are able to live better and longer lives so that people understand there is a direct relationship between cost and benefit," he told the Vermont Business Journal in a fawning profile several years ago.

    But a closer look at Blue Cross Blue Shield's record during these years suggests that maybe these financial successes came at the expense of its customers. In October 2008, shortly before Milnes retired, BISHCA issued a scathing report on the company's business practices.

    The investigation found that Blue Cross Blue Shield violated several aspects of Vermont law and engaged in "unfair or deceptive acts or practices in the business of insurance." Among the company's crimes: write-offs of credit balances owed to customers, late premium repayments to customers and hidden fees within insurance products.

    Blue Cross voluntarily took a $250,000 fine for their actions.

    Whose signature is at the bottom of the page of that order agreeing to the fine?

    William Milnes.

    Out of context

    Sen. Susan Bartlett, one of the five Democrats running in the primary for governor this year, recently added a page on her campaign website of testimonials from people who support her bid.

    But among the people she included on that list was Shay Totten, the political columnist for Seven Days. Bartlett's campaign quotes one of his columns praising her debate style for talking in "sentences, not sound bytes." He also compares her to former Gov. Howard Dean.

    The only problem: Totten never endorsed Bartlett, which he confirmed to us last week.

    The quote came from a column where he weighed the positives and negatives of all the Democrats running for governor. Bartlett's website makes it appear that Totten has endorsed her candidacy – at the top of the page it asks others to write in to explain "why you think she should be governor."

    Capitol Beat is a weekly column by the Vermont Press Bureau, the Statehouse office of The Times Argus and the Rutland Herald.
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