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Chehalem Physical Therapy, Inc. v. Coventry Health Care, Inc.

United States District Court, D. Oregon, Portland Division

September 3, 2014


Steve D. Larson, Joshua L. Ross, STOLL STOLL BERNE LOKTING & SCHLACHTER, P.C., Portland, OR, Arthur M. Murray, Stephen B. Murray, Stephen B. Murray, Jr., Korey A. Nelson, MURRAY LAW FIRM, New Orleans, LA, Diana E. Godwin, LAW OFFICE OF DIANA GODWIN, Portland, OR, Joseph Payne Williams, Sr., Richard Bray Williams, WILLIAMS FAMILY LAW FIRM, LLC, Natchitoches, LA, Thomas A. Filo, COX COX FILO CAMEL & WILSON, LLC, Lake Charles, LA, Attorneys for Plaintiffs.

Jennifer A. Adler, V. Robert Denham, Jr., ROBINS KAPLAN MILLER & CIRESI, LLP, Atlanta, GA, John F. McGrory, Jr., DAVIS WRIGHT TREMAINE, LLP, Portland, OR, Attorneys for Defendant.


DENNIS JAMES HUBEL, Magistrate Judge.

This case concerns the proper interpretation of the reimbursement provisions of a preferred provider organization ("PPO") agreement (the "Provider Agreement") between the plaintiffs and First Health Group Corp. ("First Health"), a subsidiary of the defendant Coventry Health Care, Inc. ("Coventry"). The plaintiffs contracted with First Health to participate in the First Health Provider Network - a PPO network maintained by First Health. At issue in this case is whether Coventry properly calculated the amount of reimbursements payable to the plaintiffs for workers' compensation medical services under the terms of the Provider Agreements.

On April 16, 2013, the court certified the following Injunctive Class:

All health care providers who have a First Heal the 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) (hereafter referred to as the "fee schedule maximum"), and who have had a deduction from the billed charge when that charge was less than the fee schedule maximum. Excluded from the class are health care providers in the state of Louisiana.

Dkt. #209.

The parties conducted a comprehensive investigation of the facts and law during the prosecution of this case including, inter alia, the exchange and analysis of information pursuant to formal and informal discovery requests, meetings and conferences, interviews of potential witnesses, and depositions. The parties' counsel further investigated the applicable law as applied to the facts discovered regarding the plaintiffs' claims, possible defenses thereto, and the damages claimed by the plaintiffs.

The parties engaged in extensive settlement negotiations, and attended mediation, ultimately culminating in a Settlement Agreement (the "Settlement"). On April 1, 2014, the court entered an Order Granting Motion for Preliminary Approval of Class Action Settlement (the "Preliminary Approval Order"). Dkt. #245. Among other things, the court conditionally certified, for settlement purposes only, the following Settlement Class:

All health care providers who have or have had a First Health provider agreement, whose provider agreements have an Appendix A that has the term "maximum amount payable" in the reimbursement provision for reimbursement for services rendered to occupationally ill or injured employees, and who have had bills discounted pursuant to the First Health provider agreement during the class period, March 25, 1999 through September 3, 2014, by discounting the billed charge when the billed charge was less than the applicable state or federal fee schedule amount.

Id. The court preliminarily approved the Settlement as being within the range of a fair, reasonable, and adequate settlement in the best interests of the class; designated the two above-named plaintiffs as Class Representatives; appointed Class Counsel; established procedures for class members to opt out of or object to the Settlement; approved as to form and content the Class Notice; found that dissemination of the Class Notice as set forth in the Settlement constituted the best notice practicable under the circumstances; and scheduled a Fairness Hearing for September 3, 2014, for the court to determine whether a Final Order approving the Settlement, and judgment thereon, should be entered. Id.

The court further ordered that Notice be sent to the Settlement Class Members, and approved the forms and method of disseminating the Notice and Claim Forms and Instructions. The court found the contents of the Notice and manner of dissemination satisfied the requirements of state and federal due process, and the requirements of Federal Rule of Civil Procedure 23(c) (2) (B). Dkt. ##245, 247.

The case came on for Fairness Hearing on September 3, 2014, for the court's consideration of the parties' joint motion for final approval of the Settlement. See Dkt. #252. The court has considered the motion and all supporting documents submitted by the parties, counsels' oral presentations at the Fairness Hearing, and counsels' proposed ...

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