On September 3, 2014, the Honorable Dennis Hubel of the Federal District Court of Oregon gave Final Approval to a class action settlement between health care providers and Coventry Health Care, Inc. arising out of a lawsuit that alleged that Coventry breached its PPO agreements with health care providers when it improperly calculated the amount of reimbursements payable to the plaintiffs for workers’ compensation medical services.
The class included all health care providers who have a First Health PPO Provider Agreement with a reimbursement procedure providing for the payment of the lesser of (a) the billed charge, or (b) a discount based on a percentage of the maximum payable amount under the applicable state’s workers’ compensation fee schedule (after application of any applicable state rules or guidelines), and who have had a deduction from the billed charge when that charge was less than the fee schedule maximum.
Under the terms of the settlement, a $5 million guaranteed fund has been established. All class members will receive a $50 payment from the fund, and the remainder of the fund will be distributed to class members that submit a copy of their contracts with Coventry. Coventry also will pay up to $3.5 million to health care providers that submit actual damages claims. The judge also approved a payment by Coventry of $2.6 million in attorney fees and costs, as well as service awards to the class representatives of $20,000. Coventry will also pay all administrative costs of the settlement.
The case has been pending over 5 years. The court certified an injunctive class in 2013. Shortly after that, the parties engaged in an extensive mediation with the nationally known mediator, Honorable Edward Infante.
In his opinion approving the settlement, Judge Hubel stated: “Class counsel are highly experienced in representing clients in class action lawsuits, and the result achieved for the plaintiffs in this case is excellent.” A copy of the opinion is available here.
Plaintiffs were represented by Stoll Berne attorneys Steve Larson and Josh Ross.
