The state of Maryland and Chicago-based Blue Cross Blue Shield Association have settled their differences over the governance of CareFirst Blue Cross Blue Shield in an agreement approved by U.S. District Judge J. Frederick Motz in Baltimore, the association reports.
Under the agreement, approved Friday, the state would revise its law mandating the number of state-appointed officials on the CareFirst board, which the association said violated its rules for use of the Blue Cross Blue Shield trademark.
The state will replace five, rather than 10, Maryland board members to CareFirst's 21-member corporate board by Jan. 1, the agreement says. The five new members would work with Maryland board members to replace seven more by July 1, 2004.
In addition, the state insurance commissioner would be able to challenge new executive compensation guidelines drafted by CareFirst rather than directly regulating them, as directed by the law.
"We are delighted to have an agreement that preserves CareFirst's right to continue as a Blue Cross and Blue Shield company," the association says in a statement.