Rehabilitator to accept offers on The Wellness Plan assets from
qualified parties holding a valid Michigan HMO license

Office of Financial and Insurance Services (OFIS) Commissioner Linda A. Watters—in her capacity as court-appointed Rehabilitator—stated today that AMERIGROUP, the Virginia based managed health care company has terminated the Letter of Intent signed on April 1, 2004.

“Simply put, we had a deal with AMERIGROUP—who then wanted to renegotiate rates with the State after-the-fact—and when they were turned down, they terminated the agreement,” said Watters. “They knew the proposed rates, agreed to move forward with the deal, and then attempted to renegotiate the rates. When they were rebuffed, AMERIGROUP terminated the letter of intent. Not only has their conduct resulted in unnecessary disruption, but it also has wasted valuable time and resources that could have been better spent pursuing serious offers.”

“We will be immediately extending a public invitation for anyone holding a current Michigan HMO license to once again make their best offer,” said Watters. “Notice of a future hearing will be provided to creditors who will have an opportunity to voice their opinions on my recommendation regarding offers to purchase the members of The Wellness Plan.” Commissioner Watters has instructed the deputy rehabilitators running The Wellness Plan to have a bid ready for submission to the Department of Community Health by May 17, 2004.
“As I’ve stated throughout this process, as rehabilitator, my focus continues to be on ensuring both continuity of care to plan members and providing reimbursement to the provider community,” said Watters. “ We will take whatever steps necessary to ensure that this process goes as smoothly as possible.”

Commissioner Watters petitioned to have the court approve AMERIGROUP’s offer to purchase the assets of the Wellness plan on April 14, 2004. After hearings on the matter, the court approved the sale to AMERIGROUP on April 30, 2004.

The Commissioner, as court ordered rehabilitator in charge of The Wellness Plan, has overseen all post-rehabilitation payments to providers for health care services, under a Rehabilitation Order issued by Ingham County Circuit Court Judge William E. Collette

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