Attorney General's News Release

March 12, 1999

Amended Blue Cross settlement praised by consumer groups

Jefferson City, MO — Missouri Attorney General Jay Nixon and the Acting Director of the Department of Insurance, A.W. McPherson, today announced that Blue Cross and Blue Shield of Missouri has agreed to provide an additional $12.78 million into a private health care foundation to end a legal dispute over the 1994 conversion of the nonprofit Blue Cross to the for-profit RightChoice Managed Care Inc.

The amended settlement agreement was filed today in Cole County Circuit Court and received the full support of community groups representing almost a hundred organizations concerned with health-care issues, including Reform Organizations of Welfare, Missouri Association for Social Welfare, American Association of Retired Persons, the League of Women Voters of Missouri and Missouri Consumer Health Care WATCH Coalition.

"Through united efforts by involved community organizations we were able to reach an amended agreement which ensures the full and fair value of all the nonprofit assets of Blue Cross will be delivered to the new health care foundation," Nixon said."These organizations worked closely with us throughout the negotiations with Blue Cross and their united front helped ensure even greater benefits for the public."

"They join with us today in asking that the judge approve this agreement so that those in need will have benefit to the health care opportunities provided by this new foundation," Nixon said.

The amended agreement expands on a settlement agreement announced in September of 1998 which creates a health care foundation, The Missouri Foundation for Health, to be funded through the transfer of stock shares from RightChoice.

McPherson said the involvement and support of community groups was essential.

"Through these community groups more than one million Missourians were represented in our discussions with Blue Cross," McPherson said. "These groups support this amended petition without reservation."

In addition to providing a large up-front cash payment to the Missouri Foundation for Health, the amended settlement ensures citizen input in selecting the initial board of the foundation by creating a Citizen Nominating Committee and a Community Advisory Committee.

The five community groups, including the Missouri Consumer Health Care WATCH, which represents 90 organizations, signed the motion with the court, requesting approval of the amended settlement agreement.

"Consumer groups have worked long and hard to ensure a fair settlement for the public and for all parties involved," said Dr. Rachel Farr Fitch, chairman of WATCH and spokeswoman for the League of Women Voters of Missouri.

Joel Ferber, attorney for Reform Organization of Welfare (ROWEL), said the modified agreement represents a total victory for Missouri health care consumers.

"We strongly believe the court should approve the amended settlement because it meets all of the concerns that precipitated this controversy in the first place," he said.

"This is a great day for health care in Missouri when community groups working together can reach agreement on a settlement that benefits Missourians," said Erma Cunningham of AARP.

"This is a great victory for the uninsured and people with low incomes in Missouri," said Jeanette Oxford, executive director of ROWEL. "We thank Judge Brown and the Special Master for creating a process through which justice could be done."

"The proposed settlement promises a new opportunity for uninsured and underinsured people in the state to get access to decent health care," said Peter De Simone, executive director of the Missouri Association for Social Welfare. "The negotiators for the Attorney General and Blue Cross, and the consumer groups deserve our appreciation for a job well done. We look forward to the moment when this new people's health foundation gets started."

John A. O'Rourke, CEO of RightChoice and Blue Cross and Blue Shield, said, "The agreement will benefit the citizens of Missouri as we create the largest health care foundation in the state dedicated to providing health care to underinsured and uninsured Missourians."

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818