A Settlement with CareFirst?

I hope you saw the recent article in the Washington Business Journal with the headline “CareFirst CEO Chet Burrell says it’s time to finally end the 10-year fight over its surplus.” We agree with Mr. Burrell.

That is why this week we informed Mr. Burrell’s lawyers, the D.C. Insurance Commissioner, the D.C. Attorney General, and the D.C. Court of Appeals that DC Appleseed is prepared to enter immediate negotiations with CareFirst to determine a fair settlement of this 10-year fight. We hope the company and the Commissioner will agree to do that. Here is why they should.

You may remember that in April, CareFirst proposed to spend $7.5 million annually on community health needs for the next ten years in order to meet its obligation to reinvest its excessive surplus. The problem with this proposal was that in our pending appeal before the D.C. Court of Appeals, we will be arguing that the amount the company needs to be reinvesting is much more than this–$300 million. Still, as we said in our May 9 comments with the D.C. Insurance Commissioner, we welcome CareFirst’s proposal as an opening settlement offer. And as we also said, we are ready to negotiate with CareFirst on an amount that is fair to the company and to the public.

We were glad to see that on May 23, when the company’s response to our comments was due, neither CareFirst nor anyone else objected to our proposal that the D.C. Commissioner should convene immediate settlement negotiations involving DC Appleseed, CareFirst, the Attorney General, and the Commissioner’s staff.

Convening such a negotiation is the right thing for the Commissioner to do at this point. If he doesn’t do that, the proceeding is certain to drag out before the agency and then the Court, making impossible an ending to this 10-year fight that both DC Appleseed and CareFirst favor. But if he does do that, there will at last be an opportunity to stop litigating and quickly come to an agreement that will fairly protect the company, its subscribers, and the public.

The Commissioner currently has given himself until June 27 to make a decision about whether to take advantage of this opportunity. We hope he acts expeditiously to direct all participants to try to negotiate a settlement.

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