AGREEMENT



         This settlement agreement is dated and entered into this twenty-third

day of July, 2003, by and among the State of Texas ("Texas"), the Office of the

Attorney General ("OAG"), the Texas Department of Insurance ("TDI"), including

the Texas Commissioner of Insurance ("Commissioner") (collectively the "State"),

and PacifiCare of Texas, Inc. ("PacifiCare"). The State and PacifiCare

(collectively the "Parties") agree as follows:



                                 I. DEFINITIONS



         For purposes of this Agreement, the following terms have the meanings

specified below:



         "Agreement" means this settlement agreement.



         "Court" means the District Court of Travis County, Texas, 250th

Judicial District.



         "HPN" means Heritage Physicians Network.



         "HSW" means Heritage Southwest Medical Group, P.A.



         "Intervenors" shall have the meaning given it in Section II, below.



         "Lawsuit" shall have the meaning given it in Section II, below.



         "MOU" means the Memorandum of Understanding, dated March 21, 2003,

entered into by the Parties.



         "MSM" means Medical Select Management.



         "Other Investigations" means all currently pending investigations by

the OAG related to PacifiCare as of the date of the MOU, including the Civil

Investigative Demands and Visitation Letters listed in Section V, below, but

excluding the two Visitation Letters listed in Section V, Item 2, below, to the

extent either of these two Visitation Letters address claims, acts, events,

occurrences or omissions that are not Released Claims, as defined below; and

with the exception of Case #44891, all pending civil investigations relating to

PacifiCare that have been referred to the Legal Division of TDI as of the date

of the MOU, including the payment of delegated and non-delegated claims as

described in Section IV, Item 4, below.



         "Other Lawsuits" means the following actions:



         1.       No. GN 103374, PacifiCare of Texas, Inc. vs. The State of

                  Texas And John Cornyn, Attorney General, Individually, and In

                  His Official Capacity; in the district court of Travis County

                  Texas, 200th Judicial District;



AGREEMENT



                                                                    PAGE 1 OF 20



{PAGE}



         2.       No. GN 103351, PacifiCare of Texas, Inc. vs. The State of

                  Texas And John Cornyn, Attorney General, Individually And In

                  His Official Capacity; in the district court of Travis County,

                  Texas, 200th Judicial District; and



         3.       No. 98-13971, The State of Texas vs. PacifiCare of Texas, Inc.

                  in the district court of Travis County, Texas, 201st Judicial

                  District.



         "Provider Bankruptcies" means the MSM and HSW bankruptcies, as

described in Section IV, Items 1 and 2, below.



         "Released Claims" means and includes any and all civil, administrative,

equitable and other claims, demands and causes of action of any nature

whatsoever against the Released Parties, whether pending or threatened,

suspected or unsuspected, contingent or non-contingent, known or unknown, for

any and all damages, fines, penalties, assessments and other remedies or relief

that in any way arise out of or in any way relate to acts, events, occurrences

and/or omissions occurring before March 31, 2003 (i) that were alleged, or that

could have been alleged, in the Lawsuit or Other Lawsuits, or (ii) that relate

to the Other Investigations. Notwithstanding the foregoing, Released Claims does

not mean and does not include any and all claims, demands or causes of action of

any nature whatsoever, whether pending or threatened, suspected or unsuspected,

contingent or non-contingent, known or unknown, for any and all damages, fines,

penalties, assessments or other remedies or relief that in any way arise out of

or in any way relate to (i) TDI Case #44891, or (ii) any and all matters under

review at TDI relating to PacifiCare that have not been referred to the Legal

Division of TDI as of the date of the MOU. In addition, with respect to the

Visitation Letter dated May 22, 2002 directed to PacifiCare Life Assurance

Company and the Visitation Letter dated March 28, 2002 directed to PacifiCare of

Texas, Inc., Released Claims does not mean and does not include actions for

injunctive relief directly related to PacifiCare's documentation and methodology

of claims adjustments and documentation of claim payments and denials with

respect to commercial claims for health care services not subject to capitation

and rendered by direct contracted providers. As to such Visitation Letters,

however, Released Claims means and includes any claim or action seeking to

compel the payment of any kind for any reason.



         "Released Parties" means and includes (i) with respect to releases

given by the State: PacifiCare of Texas, Inc., as well as its past and present

parent companies, subsidiaries and affiliates, and each of their past and

present officers, employees, agents, directors, representatives, attorneys,

predecessors, successors and assigns; and (ii) with respect to releases given by

PacifiCare: the State of Texas, the OAG, the Attorney General of the State of

Texas in his official and individual capacity, the TDI, the Commissioner in his

official and individual capacity, and their respective officers, employees,

agents, representatives and attorneys, predecessors and successors.



         "Stay" shall mean the agreed-to stay of the Lawsuit, as described in

Section III, below.



AGREEMENT



                                                                    PAGE 2 OF 20



{PAGE}



                                  II. RECITALS



         WHEREAS, on or about November 27, 2001, PacifiCare filed suit against

TDI and the State of Texas in Cause No. GN 103906, PacifiCare of Texas, Inc. vs.

The Texas Department of Insurance and the State of Texas, in the district court

of Travis County, Texas, 53rd Judicial District;



         WHEREAS, on or about February 11, 2002, the State of Texas and the

Commissioner filed suit against PacifiCare in Cause No. GV 200718, State of

Texas and Jose Montemayor, Commissioner of Insurance of the State of Texas vs.

PacifiCare of Texas, Inc., in the district court of Travis County, Texas, 250th

Judicial District;



         WHEREAS, by agreed order dated September 18, 2002, Cause No. GV 200718

was consolidated into Cause No. GN 103906, and styled PacifiCare of Texas, Inc.

vs. The Texas Department of Insurance and the State of Texas, in the district

court of Travis County, Texas, 53rd Judicial District (the "Lawsuit"), and

pursuant to the Travis County Local Rules of Procedure and Decorum, the Lawsuit

was assigned to the Honorable Judge John K. Dietz, presiding judge of the 250th

Judicial District Court;



         WHEREAS, the Texas Medical Association, Robert Newhouse, Trustee of the

Heritage Southwest Bankruptcy Estate and in his capacity as representative of

certain medical providers (which representative capacity PacifiCare reserves the

right to contest), Memorial Hermann Hospital System, and other medical providers

have intervened or may intervene in the Lawsuit (the "Intervenors");



         WHEREAS, the undersigned recognize that bona fide disputes and

controversies continue to exist between the Parties in the Lawsuit, both as to

fact and extent of liability, if any;



         WHEREAS, by reason of such disputes and controversies, the undersigned

entered into the MOU on March 21, 2003 and agreed to enter into a definitive

settlement agreement, within thirty (30) days following such date, which date

has been extended by mutual agreement of the Parties;



         WHEREAS, the Parties desire to implement a system to provide for the

resolution of claims of providers in the Provider Bankruptcies and HPN and for

the payment of outstanding delegated and non delegated claims, if any;



         WHEREAS, PacifiCare denies each of the claims alleged by the State and

the Intervenors, and further denies wrongdoing of any kind whatsoever, and does

not admit liability; and



         WHEREAS, after considering the benefits to be gained under this

Agreement, the risks associated with continuing this complex and lengthy

litigation, the likelihood of success on the



AGREEMENT



                                                                    PAGE 3 OF 20



{PAGE}



merits of the litigation, the public interest, the welfare of Texas' consumers,

and to avoid further expense and diversion of time and resources, the State and

PacifiCare believe this Agreement is fair, adequate, and reasonable.



         NOW THEREFORE IT IS AGREED by the Parties as follows:



                              III. STAY OF LAWSUIT



         Following execution of the MOU, the Parties filed a joint motion and

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC