BCBSNC officials were not surprised by the national association's decision because they were aware the association was concerned with the agreements, said BCBSNC spokeswoman Michelle Vanstory.
"We knew our agreements were going further in the power of the independent foundation than any other plan," said Vanstory. "It turns out the association just wouldn't go for anything over what they had in previous decisions approved."
Ed Domanski, spokesman for the national BlueCross BlueShield Association, said the decision was made because BCBSNC's plan did not meet the standards set for conversion set by the association.
"Their conversion plan was not in compliance with conversion rules," said Domanski.
The major issue in the conversion process is the establishment of a foundation that would address North Carolina's health needs and handle the company's business in the early days following conversion.
After the conversion, the foundation would initially receive 100 percent of the stock in the company. The foundation would then sell the stock over several years, providing money to promote the health of North Carolinians.
If the foundation received 100 percent of the company's stock, it would be in violation of the national standards, which state that no individual or entity can own more than 5 percent of the company.
But BCBSNC is not giving up on its mission to convert. Officials plan to negotiate with the N.C. Department of Insurance and the attorney general to devise a new plan that will meet the standards set by the national association.
"We now, after meeting with the association last week, have a clear idea of what they will and will not approve," said Vanstory.