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EXHIBIT 10.1
SETTLEMENT AGREEMENT
I. PARTIES
This Settlement Agreement and Release (Agreement) is entered into
between the United States of America, acting through the United States
Department of Justice and on behalf of the Office of Inspector General of the
United States Department of Health and Human Services (OIG-HHS) and the TRICARE
Management Activity (TMA), a field activity of the Department of Defense, acting
through the General Counsel of TMA (collectively, the United States); American
HomePatient, Inc. (AHOM, Inc.); American HomePatient, Inc., Delaware (AHOM
Delaware); and Xxxxxxx X. Xxxxxx. Hereafter, all of the above individuals and
entities are referred to as the Parties.
II. PREAMBLE
As a preamble to this Agreement, the Parties agree to the following:
A. AHOM, Inc. is a corporation that is incorporated, and whose
principal place of business, is in Tennessee. AHOM Delaware is a corporation
that is incorporated in Delaware and that shares the same principal place of
business as AHOM, Inc. in Brentwood, Tennessee. Collectively, AHOM, Inc. and
AHOM Delaware shall be referred to herein as the AHOM Companies. The AHOM
Companies provide medical equipment and supplies to the
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public, including persons insured under Federal health care programs. The AHOM
Companies have hundreds of branch locations nationwide.
B. Xxxxxxx X. Xxxxxx (the relator) is an individual resident of
Kentucky. In 1997, the relator filed a qui tam action in the United States
District Court for the Western District of Kentucky entitled United States ex
rel. Xxxxxxx X. Xxxxxx v. American HomePatient, Inc., American HomePatient,
Inc., Delaware, and Xxxxx & Xxxxx Enterprises, Inc. (the Civil Action). From
1983 until approximately March 1998, relator was employed by the AHOM
Companies or Respro, Inc., an entity whose assets were purchased by the AHOM
Companies. Xxxxxx most recently held the position of billing manager of the AHOM
Companies' Kentucky Regional Billing Center.
C. The United States contends that the AHOM Companies submitted or
caused to be submitted claims for payment to: the Medicare program (Medicare),
Title XVIII of the Social Security Act, 42 U.S.C. xx.xx. 1395-1395ggg, the
Medicaid program, Title XIX of the Social Security Act, 42
U.S.C. xx.xx. 1396-1396v, and the TRICARE program (also known as the Civilian
Health and Medical Program of the Uniformed Services (CHAMPUS), 10 U.S.C.
xx.xx. 1071-1109.
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D. The United States contends that it has certain civil claims against
the AHOM Companies under the False Claims Act, 31 U.S.C. xx.xx. 3729-3733, and
other Federal statutes and/or common law doctrines, for engaging in the
following conduct (hereinafter referred to as the Covered Conduct) during the
period from January 1, 1995 through December 31, 1998:
(a) billing the Medicare, Medicaid, or CHAMPUS programs for the service
of providing medical equipment or supplies to patients when, in fact,
the AHOM Companies had falsified documentation, or otherwise did not
possess or retain complete and accurate documentation, demonstrating
that these services were (i) duly ordered, prescribed, or recommended
for use by the patients' attending/prescribing physicians; (ii)
furnished to the patients exactly as ordered, prescribed or recommended
by the patients' attention/prescribing physicians, (iii) medically
necessary as required by the rules and regulations of Medicare,
Medicaid and/or the CHAMPUS programs; (iv) furnished to patients who
had duly authorized the AHOM Companies to xxxx and collect
reimbursement for the claimed items directly from Medicare, Medicaid
and/or the CHAMPUS program; (v) delivered to the patients on or before
the date(s) for which the United States was billed for the services;
and/or
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(vi) delivered to the patients on the date the patients'
order/prescribing physicians intended the patients to begin using the
prescribed items;
(b) providing remuneration, such as free or discounted medical
supplies, equipment, goods or services, to physicians, hospitals,
and/or other health care providers or potential referral sources in
exchange for referrals of patients to the AHP Companies; and
(c) entering into management contracts and/or joint ventures with
hospitals, physicians and other health care providers and subsequently
filing claims to the United States government for items and services
furnished to patients resulting from referrals made in exchange for
illegal remunerations.
E. The United States also contends that it has certain administrative
claims against the AHOM Companies under the provisions for permissive exclusion
from the Medicare, Medicaid and other Federal health care programs, see e.g., 42
U.S.C. ss. 1320a-7(b) and 32 C.F.R. 199.9 (f), and the provisions for civil
monetary penalties, 42 U.S.C. ss. 1320a-7a, for the Covered Conduct.
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F. The AHOM Companies deny the contentions of the United States, as set
forth in Paragraphs D and E above. The parties agree that no provision of this
Agreement nor any consideration exchanged pursuant to this Agreement constitutes
an admission by the AHOM Companies that they engaged in, or violated any law in
connection with, the Covered Conduct.
G. In order to avoid the delay, uncertainty, inconvenience, and expense
of protracted litigation of these claims, the Parties reach a full and final
settlement as set forth below.
III. TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the mutual promises, covenants and
obligations set forth below, and for good and valuable consideration as stated
herein, the Parties agree as follows:
1. The AHOM Companies agree to pay to the United States the total sum
of seven million dollars ($7,000,000.00) plus interest (hereafter the Settlement
Amount). The payments shall be made as follows:
a. The AHOM Companies shall pay three million dollars ($3,000,000.00)
of the Settlement Amount no later than the effective date of this Agreement
(hereafter, the First Payment). Subsequent to making the First Payment, the AHOM
Companies shall
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be responsible for making a Second, Third, Fourth and Fifth Payment
(collectively, Installment Payments) to pay the remainder of the Settlement
Amount. No later than thirty three (33) months after the effective date of this
Agreement, the AHOM Companies shall pay the sum of five hundred thousand dollars
($500,000.00), plus interest, as discussed in Subparagraph b. below (hereafter,
the Second Payment). No later than forty three (43) months after the effective
date of this Agreement, the AHOM Companies shall pay the sum of five hundred
thousand dollars ($500,000.00), plus interest, as discussed in Subparagraph b.
below (hereafter, the Third Payment). No later than forty nine (49) months after
the effective date of this Agreement, the AHOM Companies shall pay the sum of
one million dollars ($1,000,000.00), plus interest, as discussed in Subparagraph
b. below (hereafter, the Fourth Payment). Finally, no later than fifty seven
(57) months after the effective date of this Agreement, the AHOM Companies shall
pay the sum of two million dollars ($2,000,000.00), plus interest, as discussed
in Subparagraph b. below (hereafter, the Fifth Payment). All of the above
payments shall be made by electronic funds transfer pursuant to written
instructions to be provided by Xxxxxxx X. Xxxxxxxx (or his designee or
successor), Assistant United States Attorney for the Western District of
Kentucky, Louisville,
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Kentucky. With respect to the First Payment only, (i) the AHOM Companies shall
set up an interest-bearing account (First Payment Interest Bearing Account) in a
financial institution, in the name, and for the sole benefit, of the United
States; (ii) pay the First Payment entirely into the First Payment Interest
Bearing Account; (iii) prior to the time that the AHOM Companies make the First
Payment, they shall direct the financial institution in which the First Payment
Interest Bearing Account is opened to transfer all funds in that Account, on the
first business day after 90 days has elapsed from the time that the payment is
made, by electronic funds transfer pursuant to written instructions to be
provided by the afore-mentioned Xxxxxxx X. Xxxxxxxx (or his designee or
successor); and (iv) the AHOM Companies shall retain no rights to withdraw any
funds from the First Payment Interest Bearing Account, or otherwise exercise
control over that Account, once the First Payment is made.
b. The amounts due to be paid by the AHOM Companies with regards to the
Installment Payments shall bear simple interest at the Current Value of Funds
Rate (CVFR), which is established by the U.S. Department of Treasury, pursuant
to 31 U.S.C. ss. 3717, on the outstanding balance accrued from the effective
date of this Agreement. Any changes to the CVFR that occur during
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the period prior to the time that the outstanding balance is completely paid
shall be incorporated into the calculation of the accrued interest owed by the
AHOM Companies. Interest on the outstanding balance that accrues by the date
that the Second Payment becomes due shall be paid by that date. Similarly,
interest on the balances that remain when each of the subsequent Installment
Payments are made, and that accrues by the dates that these subsequent
Installment Payments become due, shall be paid by these latter dates. There will
be no prepayment penalty should the AHOM Companies discharge the obligations set
forth in this Paragraph 1 earlier than scheduled, although interest on any
outstanding balance which is the subject of any prepayment shall accrue from the
effective date of this Agreement through the date of the prepayment.
c. The AHOM Companies' obligations to make the Installment Payments
described in Subparagraph a. above shall be represented by a single promissory
note in the form attached hereto as Exhibit 1, which is incorporated by
reference herein.
d. The payment obligations described in this Paragraph 1 shall be
binding not only upon the AHOM Companies but also upon all successors and
assigns of the AHOM Companies.
2. The United States agrees that, pursuant to 31 U.S.C.
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ss. 3730(d)(1), the relator's share of the Settlement Amount is sixteen and
two-thirds (16 2/3) percent of the recoveries under this Agreement. Pursuant to
31 U.S.C. ss. 3730, the United States will pay to relator his pro rata share of
sixteen and two-thirds (16 2/3) percent of the United States' recoveries
pursuant to this Agreement after the United States receives each partial payment
of the Settlement Amount from the AHOM Companies. The United States will hold in
trust for the relator the latter's share of each partial payment of the
Settlement Amount and then pay the relator his share as follows: (i) in the case
of the First Payment, the United States shall make the payment within a
reasonable period of time after receipt by the United States of the funds in the
First Payment Interest Bearing Account, and (ii) in the case of any Installment
Payment, the United States shall make the payment within a reasonable period of
time after 91 days have elapsed from the time that the United States receives
the funds; provided, however, that in the event that any of the AHOM Companies
or any of their subsidiaries files for, or is otherwise placed into bankruptcy
prior to 91 days after the AHOM Companies make a particular payment to the
United States pursuant to the specifications set forth in Paragraph 1 above, the
United States shall not be required to turn over any funds to the relator until
a reasonable period of time has
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elapsed after a final non-appealable order has been issued by the bankruptcy
court that the transfer of money to the United States was not an avoidable
transfer under Section 547 of the United States Bankruptcy Code, 11 U.S.C. ss.
547. The relator shall provide to Assistant United States Attorney Xxxxxxx X.
Xxxxxxxx (or his designee or successor) wire transfer information to allow the
relator's share to be paid by wire transfer. The United States shall not be
obligated to pay relator his respective pro rata share unless and until receipt
by the United States of the respective First Payment and Installment Payments of
the Settlement Amount.
3. Subject to the exceptions in Paragraph 6 below, in consideration of
the obligations of the AHOM Companies set forth in this Agreement, and
conditioned upon the AHOM Companies' fulfillment of their obligations to make
the payments required under Paragraph 1 above as these payments become due, the
United States, on behalf of itself, its officers, agents, agencies and
departments, agrees to release the AHOM Companies, together with their current
and former parent corporations, each of their direct and indirect subsidiaries,
brother or sister corporations, divisions, affiliates, and the successors and
assigns of any of them (the Released Entities), from any civil or administrative
monetary claim that the United States has or
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may have under the False Claims Act, 31 U.S.C. xx.xx. 3729-3733, the Program
Fraud Civil Remedies Act, 31 U.S.C. xx.xx. 3801-3812, the Civil Monetary
Penalties Law, 42 U.S.C. ss. 1320a-7a, or the common law theories of payment by
mistake, unjust enrichment, restitution, recoupment, constructive trust, breach
of contract and fraud, for the Covered Conduct. Though the AHOM Companies have
been made aware that the United States is currently investigating the AHOM
Companies' conduct after December 31, 1998, the Covered Conduct includes conduct
during the period from January 1, 1995 through December 31, 1998, and does not
include any conduct occurring after December 31, 1998.
4. In consideration of the obligations of the AHOM Companies set forth
in this Agreement, and conditioned upon the AHOM Companies' fulfillment of their
obligations to make the payments required under Paragraph 1 above as these
payments become due, the TMA agrees to release and refrain from instituting,
directing, or maintaining any administrative claim or any action seeking
permissive exclusion from the TRICARE program against the Released Entities
under 32 C.F.R. ss. 199.9 for the Covered Conduct, except as reserved in
Paragraph 6 below, and as reserved in this Paragraph. The TMA expressly reserves
all rights to comply with any regulatory obligations to exclude the AHOM
Companies from the TRICARE program under 00
Xxxxxxxxxx Xxxxxxxxx Xxxxxxx
Xxxxxx Xxxxxx and AHOM, Inc. et al.
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C.F.R. xx.xx. 199.9 (f)(1)(i)(A), (f)(1)(i)(B), (f)(1)(i)(D), and (f)(1)(iii),
based upon the Covered Conduct. Nothing in this Paragraph precludes the TRICARE
program from taking action against entities or persons, or for conduct and
practices, for which civil claims have been reserved in Paragraph 6, below.
5. Conditioned upon the AHOM Companies' and the United States's
fulfillment of their respective obligations to make the payments required under
Paragraph 1 above as these payments become due, and subject to the exceptions
provided for in Paragraph 21 below, the relator, and his attorneys, for
themselves, their heirs, successors and assigns, will release and will be deemed
to have released and forever discharged:
(1) the Released Entities from any claims the relator or his
attorneys have or may have that arise under or relate to any of the allegations
in the Civil Action and/or the Covered Conduct, including, all claims pursuant
to 31 U.S.C. ss. 3730, including those for attorneys' fees, expenses and costs;
and
(2) the United States and the Released Entities from any
claims arising from or relating to the filing of the Civil Action, or, pursuant
to 31 U.S.C. ss. 3730(d)(1), for a share of the proceeds of the settlement under
this Agreement.
6. Notwithstanding any term of this Agreement, specifically reserved
and excluded from the scope and terms of
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this Agreement as to any entity or person (including the Released Entities) are
any and all of the following:
(1) Any civil, criminal or administrative claims arising under
Title 26, United States Code (Internal Revenue Code);
(2) Any criminal liability;
(3) Except as explicitly stated in this Agreement, any
administrative liability, including mandatory or permissive exclusion from
Federal health care programs, pursuant to 42 U.S.C. xx.xx. 1320a-7(a),
1320a-7(b);
(4) Any liability by the Released Entities to the United States
(or its agencies) for any conduct other than the Covered Conduct, including but
not limited to any liability for any conduct that occurred after 1998;
(5) Any claims based upon such obligations as are created by this
Agreement;
(6) Any express or implied warranty claims or other claims for
defective or deficient products or services, including quality of goods and
services, provided by the Released Entities;
(7) Any claims against any individuals, including officers and
employees of the Released Entities;
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(8) Any civil or administrative liability by the Released Entities
to any State relating to the State share of funds paid to the Released Entities
by the Medicaid program;
7. The United States has obtained sworn statements from the AHOM
Companies regarding their current financial status as well as statements
publicly filed by the AHOM Companies with the Securities and Exchange Commission
(collectively, the Financial Statements). The United States has relied on the
accuracy and completeness of the Financial Statements in reaching this
Agreement. The AHOM Companies and their subsidiaries warrant that each of the
Financial Statements (including the related notes) presents fairly, in all
material respects, the consolidated financial position and consolidated results
of operations and cash flows of the AHOM Companies and their subsidiaries as of
the respective dates for the respective periods set forth therein, all in
conformity with generally accepted accounting principles consistently applied
during the periods involved except as noted therein, and subject, in the case of
the unaudited interim financial statements, to normal and recurring year-end
audit adjustments that have not been and are not expected to be material in
amount. As such, the AHOM Companies and their subsidiaries, further warrant that
they do
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not own or have an interest in any assets which are not accounted for by the
Financial Statements.
a. The AHOM Companies represent that the Financial Statements did not
contain any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
b. In the event that the United States learns that the Financial
Statements contained an untrue statement of a material fact or omitted to state
a material fact required to make the statement not misleading with respect to
the existence of asset(s) in which the AHOM Companies and/or their subsidiaries
had an interest at the time of this Agreement, and in the event such
nondisclosure or misrepresentation changes the estimated net worth of the AHOM
Companies set forth on the Financial Statements by one million dollars
($1,000,000.00) or more, the United States may at its option: (1) rescind this
Agreement and file suit upon the underlying claims described in Paragraphs II.
C. and D. (or reinstate the Civil Action, with relator retaining all rights and
interests under 31 U.S.C. ss. 3730); or (2) let the Agreement stand and collect
the full Settlement Amount plus one hundred percent (100%) of the value of the
previously undisclosed net worth of the AHOM Companies. The only defense
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that the AHOM Companies may raise in a civil action to enforce this Paragraph is
the defense that the value of any assets that were not disclosed, and/or the
extent to which the net worth of the AHOM Companies were understated, in the
Financial Statements was less than one million dollars ($1,000,000.00).
Otherwise, the AHOM Companies agree not to contest any collection action
undertaken by the United States pursuant to this provision.
8. The AHOM Companies waive and will not assert any defenses that they
may have to any criminal prosecution or administrative action relating to the
Covered Conduct, which defenses may be based in whole or in part on a contention
that, under the Double Jeopardy Clause in the Fifth Amendment of the
Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the
Constitution, this Settlement bars a remedy sought in such criminal prosecution
or administrative action. The AHOM Companies agree that this settlement is not
punitive in purpose or effect. Nothing in this Paragraph or any other provision
of this Agreement constitutes an agreement by the United States concerning the
characterization of the Settlement Amount for purposes of the Internal Revenue
Laws, Title 26 of the United States Code.
9. The AHOM Companies fully and finally release the United States, its
agencies, employees, servants, and agents from any
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claims (including attorneys fees, costs, and expenses of every kind and however
denominated) which the AHOM Companies have asserted, could have asserted, or may
assert in the future against the United States, its agencies, employees,
servants, and agents, related to the Covered Conduct and the United States'
investigation and prosecution thereof.
10. In the event that on the date that this Settlement Agreement
becomes effective any Medicare or TRICARE carrier, intermediary and/or
contractor or any State payer is withholding payment to the AHOM Companies, or
any other entity included within the Released Entities, related to the Covered
Conduct, the Settlement Amount that the AHOM Companies must pay pursuant to
Paragraph 1 of this Agreement will not be decreased as a result of the denial of
any such claims for payment; and the AHOM Companies agree not to resubmit to any
Medicare carrier or intermediary, TMA or any State payer any previously denied
claims related to the Covered Conduct, and agree not to appeal any such denials
of claims.
11. The AHOM Companies agree that all costs (as defined in the Federal
Acquisition Regulations ("FAR") ss. 31.205-47 and in Titles XVIII and XIX of the
Social Security Act, 42 U.S.C. xx.xx. 1395-1395ddd (1997) and 1396-1396v (1997),
and the regulations promulgated thereunder) incurred by or on behalf of the AHOM
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Companies, or any of the other Released Entities, in connection with: (1) the
matters covered by this Agreement, (2) the Government's audit(s) and civil and
any criminal investigation(s) of the matters covered by this Agreement, (3) the
AHOM Companies' investigation, defense, and corrective actions undertaken in
response to the Government's audit(s) and civil and any criminal
investigation(s) in connection with the matters covered by this Agreement
(including attorney's fees), (4) the negotiation of this Agreement, and (5) the
payments made pursuant to this Agreement, are unallowable costs on Government
contracts and under the Medicare program, Medicaid program, TRICARE/CHAMPUS
program, Veterans Affairs program (VA) and Federal Employee Health Benefits
Program (FEHBP) (hereafter, unallowable costs). These unallowable costs will be
separately estimated and accounted for by the AHOM Companies, and the AHOM
Companies will not charge such unallowable costs directly or indirectly to any
contracts with the United States or any state Medicaid program, or seek payment
for such unallowable costs through any cost report, cost statement, information
statement or payment request submitted by the AHOM Companies or any of their
subsidiaries, successors or assigns to the Medicare, Medicaid, TRICARE/CHAMPUS,
VA or FEHBP programs.
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The AHOM Companies further agree that within sixty (60) days of the
effective date of this Agreement, they will identify to applicable Medicare and
TRICARE fiscal intermediaries, carriers and/or contractors, and Medicaid, VA and
FEHBP fiscal agents, any unallowable costs (as defined in this Paragraph)
included in payments previously sought from the United States, or any State
Medicaid Program, including, but not limited to, payments sought in any cost
reports, cost statements, information reports, or payment requests already
submitted by the AHOM Companies, or any other Released Entities, and will
request, and agree, that such cost reports, cost statements, information reports
or payment requests, even if already settled, be adjusted to account for the
effect of the inclusion of the unallowable costs. The AHOM Companies agree that
the United States will be entitled to recoup from the AHOM Companies any
overpayment as a result of the inclusion of such unallowable costs on
previously-submitted cost reports, information reports, cost statements or
requests for payment. Any payments due after the adjustments have been made
shall be paid to the United States pursuant to the direction of the Department
of Justice, and/or the affected agencies. The United States reserves its rights
to disagree with any calculations submitted by the AHOM Companies or any of
their successors, assigns or subsidiaries,
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on the effect of inclusion of unallowable costs (as defined in this Paragraph)
on the AHOM Companies', or any other Released Entities' cost reports, cost
statements or information reports. Nothing in this Agreement shall constitute a
waiver of the rights of the United States to examine or reexamine the
unallowable costs described in this Paragraph.
12. This Agreement is intended to be for the sole benefit of the
Parties and other individuals and entities whose liability is released pursuant
to Paragraphs 3-5 above, and by this instrument the Parties do not release any
claims against any other person or entity.
13. The AHOM Companies agree that they will not seek payment for any
of the health care xxxxxxxx covered by this Agreement from any health care
beneficiaries or their parents or sponsors. The AHOM Companies waive any causes
of action against these beneficiaries or their parents or sponsors based upon
the claims for payment covered by this Agreement.
14. The Parties expressly warrant that, in evaluating whether to
execute this Agreement, the Parties (i) have intended that the mutual promises,
covenants and obligations set forth herein constitute a contemporaneous exchange
for new value given to the AHOM Companies, within the meaning of 11 U.S.C. ss.
547(c)(1), and (ii) have concluded that these mutual promises,
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covenants and obligations do, in fact, constitute such a contemporaneous
exchange.
15. In the event that any of the AHOM Companies or their subsidiaries
(the Bankruptcy Debtor) commences, or a third party commences, within 91 days of
any payment under this Agreement, any case, proceeding or other action (i) under
any law relating to bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have any order for relief of the Bankruptcy Debtor's debts, or
seeking to adjudicate the Bankruptcy Debtor as bankrupt or insolvent, or (ii)
seeking appointment of a receiver, trustee, custodian or other similar official
for the Bankruptcy Debtor or for all or any substantial part of the Bankruptcy
Debtor's assets, and in the event that any such action that is commenced by a
third party is not dismissed within 60 days of its commencement, the AHOM
Companies agree as follows:
a. The AHOM Companies will not plead, argue or otherwise take the
position in any such case, proceeding or action that (i) any payment under this
Agreement may be avoided under 11 U.S.C. ss. 547; (ii) with respect to any
obligations pursuant to this Agreement or other claims by the United States, the
Bankruptcy Debtor was insolvent at the time this Agreement was entered into
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or became insolvent as a result of the payments made to the United States and/or
relator hereunder; or (iii) the mutual promises, covenants and obligations set
forth in this Agreement do not constitute a contemporaneous exchange for new
value given to the AHOM Companies.
b. In the event that any case, proceeding, or other action described in
the first clause of Paragraph 15 is commenced and the AHOM Companies do not, or
are unable to, honor the payment obligations hereunder, (i) the United States
may assert in any such case, proceeding or other action the full alleged amount
of its claim against the Bankruptcy Debtor under the False Claims Act and other
federal statutes and/or common law doctrines, and said amount shall not in any
way be limited to the Settlement Amount set forth in Paragraph 1 or any amount
set forth in Paragraph 15, and (ii) the AHOM Companies agree that the United
States shall hold a valid, allowed, liquidated, non-contingent, undisputed claim
against the Bankruptcy Debtor for at least $20 million less payments received
pursuant to this Agreement, in any case, proceeding, or other action described
in the first clause of Paragraph 15, though to the extent consistent with
Subparagraph 15.b.(i) above, this provision does not deprive the AHOM Companies
of the right to contest any amount of the United States' claims in excess of $20
million;
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c. If and to the extent that the Bankruptcy Debtor's obligations
hereunder are avoided for any reason, including, but not limited to, through the
exercise of any avoidance powers under the Bankruptcy Code, the United States,
at its sole option, may rescind the releases in this Agreement, and bring any
civil and/or administrative claim, action or proceeding against the Bankruptcy
Debtor for the claims that would otherwise be covered by the releases provided
in Paragraphs 3-4, above, with the relator retaining all rights and interests
under 31 U.S.C. ss. 3730.
d. If the United States chooses to rescind the releases in accordance
with Paragraph 15.c., the AHOM Companies agree that (i) any such claims, actions
or proceedings brought by the United States (including any proceedings to
exclude any of the AHOM Companies from participation in Medicare, Medicaid or
other federal health care programs) are not subject to an "automatic stay"
pursuant to 11 U.S.C. ss. 362(a) as a result of the action, case or proceeding
described in the first clause of this Paragraph 15, and that the AHOM Companies
will not plead, argue or otherwise contend that the United States' claims,
actions or proceedings are subject to an automatic stay; (ii) the AHOM Companies
will not seek relief under 11 U.S.C. ss. 105 to enjoin
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or restrain the United States from pursuing such claims, actions or proceedings;
and (iii) the AHOM Companies will not plead, argue or otherwise raise any
defenses under the theories of statute of limitations, laches, estoppel or
similar theories, to any such civil or administrative claims, actions or
proceeding which are brought by the United States within 90 calendar days of
written notification to the AHOM Companies that the releases herein have been
rescinded pursuant to this Paragraph, except to the extent such defenses were
available on the date that the Civil Action was filed.
e. The AHOM Companies further agree that the express waivers and
agreements set forth in Paragraphs 14 and 15 are in consideration for the final
settlement of the United States' claims against it in the Civil Action as
described herein. Any payments made by the Bankruptcy Debtor (described above)
to and received by the United States will be credited toward the liability of
any of the other AHOM Companies. If, prior to, or during the pendency of any
case, proceeding, or other action described in Paragraphs 14 and 15, the
Settlement Amount is paid to the United States in full, the United States will
not claim additional monies in connection with this Agreement.
16. Unless otherwise agreed to in writing between or among any of the
Parties, each party to this Agreement will bear its
Settlement Agreement Between
United States and AHOM, Inc. et al.
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25
own legal and other costs incurred in connection with this matter, including the
preparation and performance of this Agreement.
17. The AHOM Companies and the relator represent that this Agreement is
freely and voluntarily entered into without any degree of duress or compulsion
whatsoever. Pursuant to 31 U.S.C. ss. 3730(c)(2)(B), the relator asserts that
the settlement of the allegations to the Complaint in the Civil Action is fair,
adequate and reasonable under all the circumstances.
18. This Agreement is governed by the laws of the United States. The
Parties agree that the exclusive jurisdiction and venue for any dispute arising
between and among the Parties under this Agreement will be the United States
District Court for the Western District of Kentucky, where the Civil Action was
filed.
19. Promptly after this Agreement is executed, the Parties will notify
the Court in the Civil Action, simultaneously, that (a) the United States is
intervening in the Civil Action, (b) notwithstanding such intervention, the
Parties have reached a settlement, and pursuant to this settlement all Parties
have stipulated that:
(i) the Civil Action be dismissed with prejudice and with no
additional costs as to the relator, and
Settlement Agreement Between
United States and AHOM, Inc. et al.
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26
(ii) the Civil Action be dismissed with prejudice and with no
additional costs as to the United States and consistent with the
terms of this Agreement, except that the Civil Action shall be
dismissed without prejudice to the United States with respect to
the allegations in the Civil Action that the AHOM Companies billed
Federal health care programs for separate medications in
circumstances where the medications were required by Federal
regulations and guidelines to be billed as a single, combined
drug.
20. After the First Payment has been made by the AHOM Companies
pursuant to Paragraph 1 and the Court has dismissed the Civil Action, the AHOM
Companies and their attorneys, and their successors, assigns and subsidiaries,
will release and will be deemed to have released and forever discharged the
relator and his counsel from any claims or counterclaims arising from their
prosecution of the Civil Action; provided, however, that nothing in this
Paragraph:
(a) prohibits the United States or the AHOM Companies from taking
action to enforce the terms or provisions of this Agreement.
(b) resolves or in any manner affects any claims the United States has
or may have against the relator arising
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United States and AHOM, Inc. et al.
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27
under Title 26, U.S. Code (Internal Revenue Code), or any claims
arising under this Agreement.
21. This Agreement constitutes the complete agreement between the
Parties that involves the United States or any of its agencies. This Agreement
may not be amended except by written consent of the Parties. A separate
agreement has been entered into between Xxxxxxx Xxxxxx and the AHOM Companies
that resolves Xx. Xxxxxx'x claims for attorneys fees, expenses and costs
pertaining to the subject of this Agreement. The United States is not a party to
that separate agreement. Notwithstanding any other language in this Agreement,
all parties specifically agree that any claims that the relator or his attorneys
have or may have against the Released Entities for attorneys fees or for
retaliation under 31 U.S.C. ss.3730(h), KRS 205.8465(3), or the common law, are
reserved and not affected in any way by this Agreement.
22. The undersigned individuals signing this Agreement on behalf of the
AHOM Companies and the relator represent and warrant that they are authorized by
those parties to execute this Agreement. The undersigned United States
signatories represent that they are signing this Agreement in their official
capacities and that they are authorized to execute this Agreement.
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United States and AHOM, Inc. et al.
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28
23. This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same agreement.
24. This Agreement is effective on the date of signature of the last
signatory to the Agreement.
THE UNITED STATES OF AMERICA
/s/ Xxxxxx X. Xxxxx Dated: _________
-------------------
XXXXXX X. XXXXX
Trial Attorney
Commercial Litigation Branch
Civil Division
U. S. Department of Justice
Settlement Agreement Between
United States and AHOM, Inc. et al.
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/s/ Xxxxxxx X. Xxxxxxxx Dated: _________
-----------------------
XXXXXXX X. XXXXXXXX
Assistant United States
Attorney
Western District of
Kentucky
/s/ Xxxxx Xxxxxx Dated: _________
----------------
XXXXX XXXXXX
Assistant Inspector General
for Legal Affairs
Office of Counsel to the
Inspector General
Office of Inspector General
U.S. Department of Health and
Human Services
/s/ Xxxxxx X. Xxxxxxxx Dated: _________
----------------------
XXXXXX X. XXXXXXXX
Deputy General Counsel
TRICARE Management Activity
U.S. Department of Defense
THE RELATOR -- XXXXXXX XXXXXX
/s/ Xxxxxxx X. Xxxxxxxx, Xx. Dated: _________
----------------------------
XXXXXXX X. XXXXXXXX, XX.
WM. XXXXXXX XXXXXX
Xxxxxxxx & Xxxxxx
/s/ Xxxxxxx X. Xxxxxx Dated: _________
---------------------
XXXXXXX X. XXXXXX
Settlement Agreement Between
United States and AHOM, Inc. et al.
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AHOM, Inc. and AHOM Delaware
/s/ Xxxxxx X. Xxxxxx Dated: _________
--------------------
XXXXXX X. XXXXXX
Xxxx Xxxxx, Xxxxxx &
Xxxxxxx, P.C.
0000 X Xx., X.X.
Xxxxxxxxxx, X.X. 00000
Counsel for AHOM, Inc. and
AHOM Delaware
/s/ Xxxxxx Xxxxxxx Dated: _________
XXXXXX XXXXXXX
Chief Executive Officer, AHOM,
Inc. and AHOM Delaware
Settlement Agreement Between
United States and AHOM, Inc. et al.
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