Blue Shield Faces More Heat Over Nonprofit Status, $1.2 Billion Deal

Health insurance giant Blue Shield of California is facing more questions over its loss of tax-exempt status as it tries to win state approval of a $1.2-billion acquisition.

A former Blue Shield executive is accusing the San Francisco insurer of giving contradictory answers to state officials about its corporate structure. And consumer advocates are calling on Blue Shield to disclose details of a state audit that examined the company's taxpayer subsidy.

These issues are likely to dominate a hearing Monday in Sacramento held by the California Department of Managed Health Care.