Case: 4:21-cv-00400-SPM Doc. #: 1 Filed: 04/05/21 Page: 1 of 27 PageID #: 1
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`VALUED PHARMACY SERVICES
`OF THE MIDWEST, LLC D/B/A
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`NFP RX SOLUTIONS,
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`Plaintiff,
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`v.
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`AVERA HEALTH PLANS, INC.,
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`Defendant.
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF MISSOURI
`EASTERN DIVISION
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`) Jury Trial Demanded
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`Case No.
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`COMPLAINT
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`COMES NOW Plaintiff Valued Pharmacy Services of the Midwest, LLC d//b/a NFP Rx
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`Solutions (“VPS”), and for its Complaint against Defendant Avera Health Plans, Inc. (“Avera”),
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`states as follows:
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`PRELIMINARY STATEMENT
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`1.
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`The pharmacy benefits world is complex, but Avera’s scheme in this case was
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`simple: Avera tricked VPS into providing Avera the information, services, and work product
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`Avera needed to save millions of dollars per year in connection with its specialty pharmacy
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`benefit program, then pretended it had decided not to use VPS’s information, services, and work
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`product after all, to avoid paying VPS.
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`2.
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`In reality, Avera brazenly stole and is using the information, services, and work
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`product provided by VPS in connection with the design, validation, and implementation of a
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`customized specialty pharmacy benefit program for Avera.
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`3.
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`Avera reaped the benefits of VPS’s proprietary industry knowledge, special
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`industry relationships, and hundreds—if not thousands—of hours of customized work undertaken
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`on an expedited basis to accommodate Avera’s requested timeline for implementing the new plan.
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`4.
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`After months of working together, and after Avera had received all of the
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`components of the specialty pharmacy benefit program VPS had designed and created for it,
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`Avera abruptly told VPS that Avera would not be moving forward with implementing the
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`program. Avera further claimed it had known VPS’s plan concept all along, and VPS had
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`provided little of value, claiming that most of the value was in changing the plan design to utilize
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`a twenty percent coinsurance rate, which Avera contended was not a proprietary coinsurance
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`amount.
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`5.
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`VPS was shocked by Avera’s decision, as well as its statements. VPS had worked
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`long hours over eight months to develop, validate, and operationalize the program for a January 1,
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`2021 start date.
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`6.
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`Avera’s sudden about-face not only was incongruent with its business dealings
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`with VPS up to that point, it also made little financial sense for Avera. VPS’s program would have
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`saved Avera millions of dollars per year. And, thanks to VPS, virtually all the work had been done
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`to complete its implementation.
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`7.
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`Unbeknownst to VPS, Avera’s course of conduct was intended to extract and retain
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`the value of all of the work VPS had provided, while attempting to avoid paying for such work.
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`Approximately one month after being told that Avera would not be moving forward with the
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`program, VPS learned that Avera had lied. Specifically, VPS was contacted by one of Avera’s
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`members who had received a letter from Avera, which was based upon the letter VPS provided to
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`Avera as part of its efforts to design and implement the new program, and from which Avera had
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`failed to remove VPS’s telephone number. VPS has since heard from two additional Avera
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`members who received similar letters. The recipients of these letters worked for different
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`employers. From these letters, it is clear that Avera has simply taken VPS’s work product,
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`implemented all elements of the program that VPS spent countless hours developing, and is
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`utilizing and reaping the benefits of VPS’s work.
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`8.
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`Avera fraudulently and unjustly induced VPS to provide extensive services,
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`proprietary information, and work product to Avera in connection with the design, validation, and
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`implementation of a specialty pharmacy benefit program, and Avera fraudulently and unjustly
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`accepted and retained the benefits of that work without compensation to VPS, while misleading
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`VPS into believing that Avera would pay Avera for its work and maintain an ongoing
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`relationship. Then, when Avera abruptly reneged on finalizing a master services agreement—after
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`months of work by VPS, at a time when VPS had completed all work necessary to implement the
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`new program design—Avera falsely claimed that Avera would not be moving forward with
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`implementation of VPS’s program and that the work provided by VPS was worthless.
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`9.
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`VPS is entitled to compensatory and punitive damages.
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`THE PARTIES
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`10.
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`Plaintiff VPS is a limited liability company organized under the laws of the State
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`of Missouri. Its principal office is located at 691 Trade Center Blvd., Chesterfield, Missouri, and
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`its members are citizens of New York and Delaware.
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`11.
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`Defendant Avera is a corporation organized and existing under the laws of the
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`State of South Dakota, with its principal office located at 5300 S. Broadband Lane, Sioux Falls,
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`South Dakota.
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`VENUE AND JURISDICTION
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`12.
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`This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. §
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`1332, because this action is between citizens of different states, and the amount in controversy
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`exceeds the sum of $75,000, exclusive of interest and costs.
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`13.
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`This Court has personal jurisdiction over Avera, because Avera reached out to VPS
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`in the State of Missouri to induce VPS to design, validate, and implement a program, and Avera
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`negotiated and transacted business with VPS within the State of Missouri and within this district.
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`14.
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`Venue is proper in this district pursuant to 28 U.S.C. §§ 1391(b)(2), 1391(c)(2),
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`and 1391(d).
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`GENERAL ALLEGATIONS
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`15.
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`VPS is a pharmacy benefits management (“PBM”) consulting firm. It works with
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`employers and other health plan providers to develop customized pharmacy benefit plans. These
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`plans maximize pharmacy benefits for end users while also identifying cost-saving solutions for
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`VPS’s clients, employers or health plans who administer pharmacy benefits.
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`16.
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`Avera is a health plan provider that serves more than 85,000 customers. Avera
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`manages health benefits for individuals, families, and employee groups by providing medical care
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`for these plan participants directly or through insurance, reimbursement, or otherwise.
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`Avera’s Initiation of the Consulting Relationship with VPS
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`17.
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`In or around February 2020, Avera reached out to VPS in Missouri through
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`Avera’s agent, Axia Strategies (“Axia”), to inquire about the solutions VPS might be able to
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`provide Avera.
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`18.
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`Avera was trying to cut costs for its “specialty” pharmacy benefits plan.
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`19.
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`Unlike retail pharmacies, specialty pharmacies focus on complex and chronic
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`conditions requiring specialty prescriptions. These prescriptions generally require special handling
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`and administration, and they can be prohibitively expensive.
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`20. Manufacturers of these specialty medications often provide certain patients with
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`incentives or rebates via “copay cards.” Employers and health plan providers can also tap into
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`discounts and savings, but they must implement a unique pharmacy benefit design and savings
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`program like the one VPS designed for Avera. If the employers and health plan providers do not
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`implement the unique benefit design and savings program, they will not realize the discounts or
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`savings. All of these incentives have complex conditions and certain limitations, which vary by
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`medication.
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`21.
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`Through years of research and through its industry relationships, VPS has
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`developed an exhaustive and proprietary compilation and understanding of these copay card
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`programs, discounts, and other incentives, their conditions, and limitations, and VPS has
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`developed a proprietary methodology for understanding and evaluating the specific incentives
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`available to offset the costs of specialty medications.
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`22.
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`Prior to reaching out to VPS about a redesign of its specialty pharmacy program,
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`among other things, Avera was helping patients sign up for copay cards to reduce patient copays,
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`but Avera itself was not realizing any savings. Avera had also tried to work with at least one other
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`PBM consulting firm, PillarRx Consulting, LLC, which is also located in St. Louis, Missouri.
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`PillarRx was unable to provide a solution meeting Avera’s specific requirements.
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`23.
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`In or around February 2020, Avera stated that it desired to engage VPS to assist
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`Avera with developing a strategy to lower its specialty pharmacy benefits costs. However, Avera
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`claimed that it did not have funds to pay for an upfront consulting fee, so the parties agreed and
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`Avera promised that Avera would pay for VPS’s information, services, and work product through
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`a shared savings model, rather than on an hourly basis or other pay-as-you-go arrangement.
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`24.
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`In February 2020, March 2020, and May 2020, Luke Merkel represented to VPS
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`that Avera understood VPS’s commission structure to be 20 percent of Avera’s savings from
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`VPS’s program.
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`25.
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`On April 10, 2020, Luke Merkel stated on a call with Nelly Rose and Dave Lee of
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`Avera that he was committed to working with VPS and to getting something in place for a start
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`date of January 1, 2021.
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`26.
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`During a phone call in May 2020, Luke Merkel again confirmed the parties’
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`agreement, telling VPS that the fact Avera was filing a plan design change with relevant
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`regulators meant that Avera was moving forward with the agreement with VPS.
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`27.
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`On June 11, 2020, on a call with individuals from Avera, Axia, VPS, and the CVS
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`group, Luke Merkel stated that Avera was “in operation mode” with VPS’s program.
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`28.
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`In reliance on Avera’s agreement, statements, and representations, VPS began
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`providing information, services, and work product to Avera to design, validate, and implement a
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`new specialty pharmacy benefits program that VPS believed would significantly lower Avera’s
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`specialty pharmacy benefits costs.
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`29.
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`Avera signed a non-disclosure agreement on March 23, 2020, in furtherance of this
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`relationship.
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`VPS Begins Work on a New Specialty Pharmacy Benefits Program for Avera
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`In reliance on Avera’s promises and agreement to pay, and pursuant to Avera’s
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`30.
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`request, VPS designed a specialty pharmacy benefits program for Avera that VPS believed would
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`result in significant savings to Avera—millions of dollars per year—compared to Avera’s existing
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`specialty pharmacy benefits plan, which only benefitted the patient and did not realize any
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`potential cost savings for Avera.
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`31.
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`The program VPS developed for Avera included a variety of elements that, in
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`combination, innovatively addressed Avera’s unique needs. Among other things, this program (1)
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`involved a change to Avera’s coinsurance on specialty drugs, (2) required the removal of Avera’s
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`copay maximum limits, (3) used Avera’s 30-day supply limit, (4) utilized Avera’s exclusive
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`specialty pharmacy network, and (5) enabled Avera’s enrollment in a specialty accumulator
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`adjustment program. VPS’s program built on VPS’s industry knowledge, relationships, and
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`proprietary information and methodology.
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`32.
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`Among other things, the program that VPS developed for Avera would achieve
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`cost savings for Avera by changing the copay structure for Avera’s members. Specifically, each
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`member’s copay obligations would be increased, but (somewhat counterintuitively) the members’
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`overall financial burden would not increase, because the increased co-pay obligations would be
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`offset by other financial incentives (copay cards, discounts, etc.) available from various
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`manufacturers for various specialty pharmaceuticals.
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`33.
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`VPS would need to undertake significant work on behalf of Avera to finalize this
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`program and make appropriate adjustments to ensure that it would work correctly and result in
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`savings for Avera while not increasing the financial burden for Avera’s specific members
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`population, and to successfully implement it in compliance with applicable rules and regulations.
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`34.
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`Because Avera wanted to operationalize the program for a January 1, 2021 start
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`date, VPS had to act quickly over the course of 2020 to develop, validate, and implement the
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`program in order to meet that deadline.
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`35.
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`Ultimately, VPS timely developed, validated, and began implementation of a
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`specialty pharmacy benefits program for Avera that, properly implemented, would result in
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`savings for Avera of approximately 15 million dollars over three years.
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`VPS’s Analysis and Validation of the New Program for Avera
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`36.
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`To enable VPS to develop and validate a new design for the specialty pharmacy
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`benefits program, Avera provided VPS with extensive raw claims data concerning Avera’s
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`specialty pharmacy customers. Using its proprietary methodology, VPS then processed, reviewed,
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`and analyzed this data, to understand what Avera’s costs and its members’ benefits would look
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`like for each and every relevant member under VPS’s proposed program design.
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`37.
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`Avera has three separate “companies” or groups of health plan members: small and
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`large commercial customers, employees, and commercial individual customers. VPS’s analysis
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`provided detailed information for each of these three categories of Avera customers.
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`38.
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`Once Avera received VPS’s analysis, Avera understood how VPS’s program
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`design would operate in practice and the results it would obtain for Avera and its members.
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`Importantly, VPS’s analysis provided Avera with the understanding and comfort that Avera’s
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`members would still be protected under this program (that is, their financial burden would not
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`increase after implementation), and knew exactly how much manufacturer assistance could be
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`relied upon for each medication and for each member.
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`39.
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`VPS’s program design would allow Avera to minimize its costs and maximize all
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`sources of financial assistance, whereas other potential programs could cause Avera to lose
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`essential manufacturer rebates.
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`40.
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`VPS continued to prepare detailed savings analyses to give Avera confidence in the
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`soundness of VPS’s program.
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`41.
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`Ultimately, the analysis that VPS provided to Avera gave Avera the confidence it
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`needed to proceed with the restructure of its program. In addition to specific information about
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`manufacturer incentives, VPS also provided crucial, proprietary information regarding limited
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`distribution drugs, and specialty drugs that did not offer copay cards or other incentives.
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`VPS’s Initial Work to Implement the New Program for Avera
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`42.
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`From the parties’ earliest communications in February 2020, Avera discussed and
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`understood VPS’s commission fee structure. With a full understanding of and agreement to pay
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`the fee that VPS expected to receive, Avera moved forward with VPS, entering a non-disclosure
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`agreement, requesting a new program design and validation of that design, requesting
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`implementation of the new program, and otherwise accepting the benefits of VPS’s services and
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`work product. In reliance on Avera’s promises and agreement to pay, and pursuant to Avera’s
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`request, VPS provided and continued to provide the information, services, and work product for
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`the new program.
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`43.
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`Satisfied with the results of VPS’s analysis validating the new program, in May
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`2020, Avera decided to formally change the plan design Avera had on file with at least two states,
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`to be effective January 1, 2021. This new plan not only changed Avera’s cosinsurance amount to
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`20 percent, but it also removed copay maximums—something Avera had never done before.
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`44.
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`In addition, VPS prepared specific summary benefits language for Avera’s
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`summary benefits guide, as well as language for Avera’s summary of plan documents.
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`45.
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`The language provided by VPS included the following:
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`To help offset your out-of-pocket costs for specialty medications, a Specialty
`Copay Assistance program is available to you. The clinical team at VPS will
`help you receive manufacturer copay assistance to cover most, if not all, of
`your out-of-pocket expenses for your specialty medications. For more
`information and to enroll in the program, contact VPS at 1-888-201-9175
`prior to filling your specialty medication.
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`Avera requested additional copies of this language via email in May 2020.
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`Around the same time, Avera asked VPS to draft and send Axia a master services
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`46.
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`47.
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`agreement for the parties’ relationship.
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`VPS’s Additional Work to Implement the New Program for Avera:
`CVS, Avera’s Specialty Pharmacies, and the Accumulator Adjustment
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`48.
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`For the next several months in 2020, VPS continued providing critical assistance
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`setting up the new program for Avera and enabling its implementation, including extensive work
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`on the backend operations of the program.
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`49. While implementation of a new program always requires significant work,
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`implementation of the specialty benefit program designed by VPS for Avera was particularly
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`complicated and extensive. Specifically, in order to maintain the integrity of the plan design and
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`ensure compliance with applicable rules and regulations, Avera would need to somehow ensure
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`that only a member’s out-of-pocket costs (i.e. the payments that each member made)—and not the
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`amount of any copay card, discount, rebate, or other incentive that reduced the member’s
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`burden—would count toward the member’s deductible.
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`50.
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`To accomplish this, Avera would need to have a process for coordination of
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`benefits with Avera’s claims adjudicator, CVS Health (“CVS”), in order to apply an “accumulator
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`adjustment” and ensure that only a member’s out-of-pocket costs were accumulated and counted
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`toward the member’s deductible.
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`51.
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`By way of example, without the accumulator adjustment, a member with a $1,000
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`deductible who received a $1,000 rebate on their $1,000/month specialty medication would meet
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`their deductible in the very first month of the year, without accruing any actual out-of-pocket
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`expenses. This would jeopardize the integrity of the program, particularly with respect to patients
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`on high deductible health plans’ eligibility for health savings account reimbursements. It would
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`also impact Avera’s bottom line. The sooner patients’ deductibles are met, the sooner Avera
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`becomes responsible for paying the full amount of any high-dollar medications for the remainder
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`of the calendar year.
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`52.
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`Ordinarily, CVS will only credit the correct amounts and apply this accumulator
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`adjustment if the member used the CVS Specialty Pharmacy exclusively. Avera, however, used
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`three independent specialty pharmacies: Avera Specialty Pharmacy (its own, in-house specialty
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`pharmacy), Monument Health Home+ Specialty Pharmacy, and Fairview Specialty Pharmacy.
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`Because Avera did not use CVS’s Specialty Pharmacy exclusively, this presented a unique
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`challenge for Avera because any claims processed using these specialty pharmacies would not
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`receive the accumulator adjustment from CVS, which jeopardized the integrity of the program.
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`53.
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`Had Avera tried to approach CVS on its own, without VPS, CVS almost certainly
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`would have declined setting up this complicated coordination of benefits. As a rule, CVS does not
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`accommodate specialty pharmacies other than its own for accumulator adjustments. Accordingly,
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`if Avera had tried to implement this plan on its own, it would be unable to appropriately adjust the
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`deductible credits and, ultimately, would have had to either forego any program redesign, and the
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`millions of dollars of associated savings, or abandon its preferred specialty pharmacies in favor of
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`CVS Specialty Pharmacy.
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`54.
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`VPS, however, made it possible for Avera to keep its specialty pharmacies and
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`continue with the new program. Specifically, VPS used its relationship with CVS to persuade it to
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`recognize Avera’s specialty pharmacies for purposes of the accumulator adjustment.
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`55.
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`But securing CVS’s agreement to recognize and work with Avera’s specialty
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`pharmacies was not the end of the story. Creating a process to coordinate benefits and share
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`information between the specialty pharmacies and the claims adjudicator in order to apply an
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`accumulator adjustment required months of intense coordination, negotiation, and work.
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`56.
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`Among other things, VPS created secure file transfer portals (“SFTPs”), created a
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`workable file format, and acted as a liaison between CVS, Avera, and each of the separate
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`specialty pharmacies in order to create a secure flow of information between CVS and Avera’s
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`preferred specialty pharmacies.
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`57.
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`VPS also had to teach managers and personnel at three different specialty
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`pharmacies how to implement VPS’s program, provide data to their IT departments, perform file
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`extracts for each pharmacy, and conduct multiple trials and correct all errors to make sure that the
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`data was transferring properly.
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`58.
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`Based on its industry relationships, VPS connected Avera with subject matter
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`experts that saved Avera countless hours of research and setup time necessary to adjust
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`accumulators.
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`59.
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`In addition, VPS worked with CVS’s account team to ensure that all accounts were
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`in place, coded, and ready to go for Avera’s implementation date of January 1, 2021.
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`60.
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`On August 20, 2020, Avera asked VPS to turn on the accumulator adjustment for
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`all lines of Avera’s health plan, effective January 1, 2021. VPS made arrangements to do so.
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`VPS’s and Avera’s Continued Negotiation of a Master Services Agreement
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`61.
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`Against the backdrop of VPS’s extensive and continued work to develop, validate,
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`and implement a new program for Avera, VPS and Avera—through Avera and Avera’s agent,
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`Axia—were continuing to negotiate a master services agreement (“MSA”) contemplating an
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`ongoing services relationship between VPS and Avera.
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`62.
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`On July 7, 2020, VPS sent a detailed MSA to Axia, which replied and inserted
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`questions and comments, including a question from Avera about the insertion of a service level
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`agreement to hold VPS accountable if specific guarantees related to deadlines and savings were
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`not met.
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`63.
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`On August 12, 2020, VPS replied to these comments in good faith, indicating that
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`while it did not have a service level agreement or guarantees in its other contracts, it was willing
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`to consider adding some to the MSA.
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`64.
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`On August 20, 2020, Avera and VPS had a call. It was during this call that Avera
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`asked VPS to turn on the accumulator adjustment VPS had coordinated with CVS for each of the
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`three Avera companies. In reliance on Avera’s agreement to the commission fee structure,
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`execution of the non-disclosure agreement, and continued and fully-engaged participation in the
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`project, VPS agreed.
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`65.
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`The Parties continued negotiating the MSA on a September 3, 2020 conference call
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`and in a September 21, 2020 email. In connection with VPS’s continued efforts to implement the
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`new program, VPS also provided Avera with detailed instructions and education about the SFTP
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`protocols needed to manage the CVS coordination of benefits.
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`66.
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`At this point, the program was essentially operable and ready to go live on January
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`1, 2021. In good faith and in reliance on Avera’s commitment to pay for VPS’s services and
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`continued engagement in the project, VPS continued following Avera’s directions with respect to
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`performing work on the program and provided all of the tools, implementation services, and
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`information Avera would need to operate the program on its own.
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`67.
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`On October 14, 2020, VPS sent Axia a final draft of the MSA, which Axia in turn
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`sent to Avera. The parties then engaged in some additional phone calls over the next several days.
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`68.
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`The draft of the MSA incorporated the terms that Avera and VPS had previously
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`discussed and agreed upon, including the agreement that Avera would provide VPS with a 20
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`percent commission on the savings that Avera received from VPS’s program. The commission
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`was estimated to be approximately three million dollars.
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`69.
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`As previously discussed, the purpose of the commission was to compensate VPS—
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`in lieu of an upfront fee and contemporaneous payment—for designing the new program, using its
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`proprietary process for validating the new program, educating and counseling Avera about how it
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`would need to set up and maintain the new program, sharing its proprietary knowledge and
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`industry relationships with Avera, managing the implementation of Avera’s new program
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`(including performing extensive work to develop a process for the accumulator adjustment), and
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`communicating with and educating Avera’s end users about how to access and use their new
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`benefits.
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`Avera Abruptly Ends its Relationship with VPS Prior to Executing the MSA,
`But After Receiving All of VPS’s Work Product
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`70.
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`In preparation for executing the final step of customer communication and
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`education, VPS had prepared a notification letter to be sent to Avera’s affected customers. Across
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`Avera’s three companies, it has approximately 1,100 specialty pharmacy customers.
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`71.
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`To meet Avera’s requested timeline, VPS printed out and stuffed these letters to be
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`mailed several weeks before the year’s end, in order to prepare customers for the plan design
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`change and give them an opportunity to contact VPS for more information, if needed.
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`72.
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`To VPS’s surprise, on October 26, 2020, Avera asked if it could handle all
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`customer communications instead of VPS, including sending notification letters to end users, in
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`exchange for a discount on VPS’s services. VPS had already prepared the entire process flow for
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`all customer service advocates, so Avera simply had to follow the plan VPS had already created.
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`In addition, VPS had already drafted the notification letter and performed the work of printing and
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`preparing thousands of letters for mailing. However, VPS was willing to consider Avera’s request
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`as a good faith gesture. VPS offered Avera a ten percent discount if Avera wanted to take on the
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`customer communication piece. This would put VPS’s compensation at an 18 percent commission
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`on the savings Avera would receive from implementing the plan, or approximately 2.6 million
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`dollars.
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`73.
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`During the same call on October 26, 2020, and after conveying disappointment that
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`VPS would not offer a greater discount, Avera feigned surprise at one component of the program
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`related to participants on high deductible health plans.
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`74.
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`Specifically, VPS’s plan had built in a “default copay” (in an amount of Avera’s
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`choosing) for patients who run out of funds on copay cards, so that the patients themselves do not
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`have to foot pharmacy bills for thousands of dollars. The high deductible patient would pay the
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`default copay of, for example, $150, and VPS would build in a safety net for Avera to cover the
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`rest of the cost in these circumstances.
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`75.
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`Avera suddenly expressed surprise at this component of the program, despite the
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`fact that VPS had provided this information to Avera multiple times and during multiple calls
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`since February 2020.
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`76.
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`Conveniently, it was not until after Avera had everything that it needed from VPS
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`to implement the new program that Avera requested a discount in exchange for performing the
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`patient mailings itself and also expressed surprise and objected to the high deductible component.
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`77.
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`Nevertheless, to alleviate Avera’s newly-voiced concerns concerning the high
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`deductible patients, VPS quickly worked to develop two alternatives. VPS also consulted with
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`several industry contacts, including Avera’s agent, Axia, to again confirm the soundness of VPS’s
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`original program with respect to high deductible patients, as well as to consider whether there
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`were any additional alternatives.
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`78.
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`After conducting this investigation, VPS called Avera on October 29, 2020, to
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`reaffirm that VPS’s program complied with applicable coverage requirements, as well as to
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`propose the alternatives VPS had developed.
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`79.
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`Although the high deductible component had been repeatedly, directly, and
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`indirectly communicated to Avera for months, during this call, Avera again informed VPS it had
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`grave concerns about the component. Despite VPS’s independent consultations and reasonable
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`alternatives to address this issue, Avera was adamant that it was not going to proceed with
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`implementation of any part of the new program—whether high deductible or PPO. Rather, Avera
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`stated that it no longer desired to work with VPS on implementing any component of the new
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`program.
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`80.
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`In addition, on or about November 5, 2020, Avera curiously insisted for the first
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`time—after nine months of extensive work to design and implement a new program—that VPS
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`Case: 4:21-cv-00400-SPM Doc. #: 1 Filed: 04/05/21 Page: 17 of 27 PageID #: 17
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`had provided nothing of value, that Avera intended to keep the coinsurance and copay limit
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`changes it had filed with Minnesota and South Dakota, that it would have made these benefit
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`changes on its own (without VPS’s recommendation and analysis), and that VPS’s information
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`and recommendations were not proprietary. According to Avera, it was too late to file any plan
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`design changes for 2020, so it would keep the 20 percent coinsurance change, but would not
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`implement the rest of VPS’s program.
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`81.
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`VPS pushed back, reminding Avera that it had provided indispensable services,
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`information, and work product to develop a program that would provide tremendous value to
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`Avera. VPS also proposed various payment options that could be arranged for a partial
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`implementation.
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`82.
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`Thereafter, on December 7, 2020, Dr. Luke Merkel called Dave Lee, the managing
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`director of VPS, for a final discussion. Dr. Merkel informed Mr. Lee that it was “too late” to do
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`anything for 2021 and that he was “done talking,” but that Mr. Lee could reach out to him in early
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`2021 to see if VPS could set something up for Avera for 2022.
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`83.
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`During this call, Dr. Merkel informed Mr. Lee that he had told everyone at Avera
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`to put the program change on hold. He also represented that he would destroy the plan-related
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`letters and they would not be going out to Avera’s members. Unbeknownst to Mr. Lee at the time,
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`Dr. Merkel’s statement was apparently intended to mislead VPS into believing that Avera would
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`not be misappropriating VPS’s work product.
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`84.
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`Notably, Dr. Merkel again reiterated Avera’s new contention that VPS’s new
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`program was not proprietary, and Avera would not be paying VPS anything at all for its extensive
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`work for Avera.
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`Case: 4:21-cv-00400-SPM Doc. #: 1 Filed: 04/05/21 Page: 18 of 27 PageID #: 18
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`An Amendment of Benefits Letter from Avera to Plan Members
`Reveals Avera’s Fraud and Theft of VPS’s Work
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`85.
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`In January 2021, VPS received a phone call from one of Avera’s members, Clark
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`Community Oil. The member had received a letter explain