Court of Appeals affirms ruling on Blue Cross suit

In an Aug. 4 ruling, the Missouri Court of Appeals, Western District, affirmed the Dec. 1996 ruling of Cole County Circuit Court Judge Thomas Brown in a suit brought by Blue Cross and Blue Shield of Missouri, the parent company of RightChoice Managed Care Inc., against the Missouri attorney general and the Department of Insurance.

Brown ruled that Blue Cross and Blue Shield of Missouri was not operating consistently with its statutory purposes as a nonprofit health services corporation, according to a press release from Blue Cross and Blue Shield.

The appeals court ruling does not contest nor seek to amend or reverse the creation of RightChoice.

The ruling does not change the company's intention to implement the settlement framework that has been jointly developed with the Missouri attorney general and the Department of Insurance as announced April 22.

The company announced that it expects a definitive agreement to be signed by Sept. 15, 1998.

The stand-still agreement with regard to other litigation at the trial-court level remains in effect until that date, the release stated.

If the appeals court ruling becomes final, the case will be remanded to Judge Brown to determine the appropriate remedy. One remedy permissible under the governing statute would be dissolution of Blue Cross and Blue Shield of Missouri.

However, under the statute, prior to dissolving the corporation, the court is required to consider whether there are reasonable alternatives to dissolution, and whether it is in the best interest of the public or the members.

The company has rights to seek rehearing in the Court of Appeals and transfer to the Supreme Court of Missouri, and it

is considering whether to exercise those rights.

"We believe the conceptual framework we have jointly developed with the attorney general and the Department of Insurance offers a remedy that serves the interests of our members, the citizens of Missouri and RightChoice shareholders," said John A. O'Rourke, president and chief executive officer of Blue Cross and Blue Shield of Missouri, in the release.

As presently proposed, the conceptual framework would resolve outstanding litigation and regulatory issues between the state and the company.

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