Exhibit 99(c)
SETTLEMENT AGREEMENT
1. Parties. The parties to this Agreement are Xxxxxxxx X.
(Xxx) Xxxxx, Attorney General, on behalf of the State of Missouri
(hereinafter "the Attorney General") and Blue Cross Blue Shield
of Missouri, a Missouri non-profit health services corporation;
RightCHOICE Managed Care, Inc., d/b/a Alliance Blue Cross Blue
Shield, a Missouri corporation; HMO Missouri, Inc., d/b/a
BlueChoice, a Missouri corporation; Healthy Alliance Life
Insurance Company, a Missouri corporation (referred to herein as
"HALIC"); and Preferred Health Plans of Missouri, Inc., a
Missouri corporation (all collectively referred to herein as
"Defendants").
2. Purposes. On February 9, 1998, the Attorney General
filed a civil action (the "Lawsuit") against Defendants in the
Circuit Court of Xxxx County, which action is styled State of
Missouri ex rel Xxxxx v. Blue Cross Blue Shield of Missouri, et
al, Cause No. CV198-171CC. In that action, the Attorney General
alleges, inter alia, that Defendants violated the Missouri
Merchandising Practices Act, X.X.Xx. Ch. 407, in the manner in
which they calculated co-payments and deductible amounts for
charges to subscribers, members, certificate holders and
insureds. The purpose of this Settlement Agreement is an
amicable resolution of the Lawsuit.
3. Consideration to the State of Missouri. Within thirty
(30) days following the satisfaction of the conditions precedent
described in Paragraph 6 of this Agreement, Defendants shall pay
to the Attorney General the sum of $1,000,000. This entire
payment is in the nature of restitution to the subscribers,
members, certificate holders and insureds of Defendants claiming
to have suffered loss from the practices at issue in the Lawsuit.
The payment to be made pursuant to this paragraph is to be
allocated among (and paid to) such persons in the sole discretion
of the Attorney General pursuant to X.X.Xx. 407.100.4.
Defendants hereby agree, in order to facilitate this allocation
and payment, to make available such records and things, and to
provide such other assistance, information or access, as the
Attorney General may deem necessary or convenient. As further
consideration, Defendants shall pay the reasonable, actual
expenses incurred by the Attorney General in calculating the
amount due to each such person, and preparing and distributing
checks representing the restitution amounts to such persons. The
total amounts to be paid by Defendants under the preceding
sentence shall in no event exceed the amount of $75,000, and
shall be payable following satisfaction of the conditions
precedent described in Paragraph 6 of this Agreement on
presentation to Defendants by the Attorney General of detailed
invoices or statements of the contractor or contractors providing
such services. Defendants shall make payment for such amounts
directly to such contractors.
4. Releases. In consideration of the payments described
in Paragraph 3, the Attorney General, for himself and on behalf
of the State of Missouri, does release Defendants, and each of
their present and past officers, agents, employees, predecessors,
successors and assigns, from any and all claims related to the
conduct which is at issue in the Lawsuit, including any and all
claims related to the disclosure to subscribers, members,
certificate holders or insureds of co-payments and deductible
amounts, and any claim that such payments were calculated without
regard to discounts negotiated with health care providers. This
Release includes all claims that were asserted or could have been
asserted in the Lawsuit, and is effective upon receipt of the
$1,000,000 payment.
5. Dismissal of Lawsuit and Tolling of Statute of
Limitations. Immediately on execution of this Agreement, the
Attorney General shall dismiss the Lawsuit without prejudice,
with each party to bear its own costs. Should this Agreement
terminate for any reason without payment to the Attorney General
of the $1,000,000 described in Paragraph 3 of this Agreement, the
Attorney General may, within sixty (60) days following the
effective date of such termination, refile as a new civil action
the Petition as filed by him in the Lawsuit. The Parties shall
treat that new civil action for all purposes, including the
statute of limitations, as if it were filed on the date of filing
of the Petition in the Lawsuit. Nothing in this Agreement
constitutes a waiver of any defense (including the defense of the
statute of limitations) to the extent such a defense was
available to Defendants on the date of filing the Lawsuit.
6. Court Approval of Principal Settlement. It is a
condition precedent to this Agreement that the condition
precedent described in the paragraph identified as "7. Court
Approval of Settlement" in that separate Settlement Agreement
entered into this date by and among Xxxxxxxx X. "Xxx" Xxxxx,
Attorney General of the State of Missouri; The Missouri
Department of Insurance and Xxx X. Xxxxxx, its Director; Blue
Cross and Blue Shield of Missouri and RightCHOICE Managed Care,
Inc. shall have occurred. It is also a condition precedent to
this Agreement that all of the obligations of the Director of
Revenue of the State of Missouri, and the Director of the
Department of Insurance of the State of Missouri under that
separate Settlement Agreement entered into this date by and among
said Directors and Healthy Alliance Life Insurance Company
("HALIC") have been fully performed, and HALIC has received the
consideration specified in Paragraph 3 of said Settlement
Agreement.
7. General Provisions.
(a) Any person executing this Agreement as an agent,
by his or her signature hereto, warrants that he or she has
authority to execute this Agreement on behalf of his or her
principal.
(b) This Agreement is a good faith, negotiated
resolution of disputed claims. Neither this Agreement nor any
act performed or document executed pursuant to or in furtherance
of this Agreement is admissible in any court proceeding, except
any proceeding seeking enforcement of this Agreement. No party,
by signing this Agreement, admits liability or fault, or admits
the validity of any claim made by any other party or position
taken by any party with respect to any matter that is the subject
of this Agreement.
(c) Captions contained in this Agreement have been inserted
here only as a matter of convenience and in no way define, limit,
extend or describe the scope of this Agreement or the intent of
any provisions hereof.
(d) This Agreement may be executed by the parties on any
number of separate counterparts, and all such counterparts so
executed constitute one agreement binding on all the parties
notwithstanding that all the parties are not signatories to the
same counterpart.
(e) This Agreement (along with Paragraph 7 of that separate
Settlement Agreement described in the first sentence of Paragraph
6 of this Agreement and Paragraph 3 of that separate Settlement
Agreement described in the second sentence of Paragraph 6 of this
Agreement) constitute the entire agreement among the parties
pertaining to the subject matter hereof. They supersede all
prior agreements, letters of intent, understandings,
negotiations, and discussions of the parties, whether oral or
written relating to the same subject matter.
(f) The parties will execute and deliver such further
documents and do such further acts and things as may be required
to carry out the intent and purpose of this Agreement.
(g) This Agreement and the rights and obligations of the
parties hereunder are to be governed by and construed and
interpreted in accordance with the laws of the State of Missouri
applicable to contracts made and to be performed wholly within
Missouri, without regard to choice or conflict of law or rules.
(h) This Agreement is binding upon and inures to the
benefit of the Attorney General, the State of Missouri, and each
of Defendants, and their respective legal representatives,
employees, agents, affiliated corporations, successors and
assigns.
Executed this 20th day of September, 1998.
STATE OF MISSOURI
By: /s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. (Xxx) Xxxxx, Attorney General
BLUE CROSS BLUE SHIELD OF MISSOURI
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, President and Chief
Executive Officer
RIGHTCHOICE MANAGED CARE, INC.,
d/b/a Alliance Blue Cross Blue Shield
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, President and
Chief Executive Officer
HMO MISSOURI, INC., d/b/a BLUECHOICE
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, Chairman
HEALTHY ALLIANCE LIFE INSURANCE CO.
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, Chairman and President
PREFERRED HEALTH PLANS OF MISSOURI, INC.
By: /s/ Xxxx X. X'Xxxxxx
Xxxx X. X'Xxxxxx, Authorized Officer
