A federal judge in Newark has granted final approval to a $160 million settlement on behalf of out-of-network ambulatory surgical centers, in connection with a legal battle with Horizon Blue Cross Blue Shield of New Jersey.
Some patients received services from the centers even though the centers were outside of their Horizon Blue health plan provider networks. The surgical centers accused Horizon of failing to provide adequate reimbursement for services rendered to those patients.
U.S. District Judge Kevin McNulty approved the settlement terms and granted $9 million in legal fees on Friday.
The move ended a 12-year legal battle.
The suit that just settled, Edwards v. Horizon Blue Cross Blue Shield of New Jersey, was filed in February 2013.
That case was filed after a proposed $22 million settlement of another suit making similar claims, Glen Ridge SurgiCenter v. Horizon Blue Cross Blue Shield of New Jersey, fell through in 2010. More than 60% of the roughly 150 class members in the Glen Ridge suit refused to be a part of the settlement.
When the Edwards complaint was filed, the plaintiffs had obtained some evidence that the plaintiffs who filed the Glen Ridge complaint did not have: documents related to a 2003 decision by Horizon to save money on its payments to ambulatory surgical centers, and documents related to the company’s hiring of a consultant. The consultant set new reimbursement rates in order to realize the surgical center reimbursement savings.
The Edwards class argued that the consultant’s plan failed to consider applicable laws, regulations and contract terms.
Horizon denied the allegations.
The Edwards settlement terms, first filed with the court in January, were reached following mediation with former U.S. District Judge Stephen Orlofsky, who is with Blank Rome in Princeton.
Most of the $160 million has already been distributed, in the form of payments to the 183 ambulatory surgical centers in the class over the past decade, according to Bruce Nagel of Nagel Rice in Roseland, New Jersey, who represented the Edwards class members.
The payments to the surgical centers are the result of revised reimbursement policies adopted by Horizon during the course of the litigation. But two subclasses of claimants — those serving small employers and those who were allegedly underpaid based on the consultant’s formula — are still waiting for $4 million in additional payments, Nagel said.
The current class representative, North Jersey Ambulatory Surgical Center, replaced Glen Ridge SurgiCenter. Glen Ridge settled with Horizon and was allowed to become an in-network provider.
In November 2011, U.S. District Judge Jose Linares held that Glen Ridge had settled only its own claims, and that the case could go forward with a new named plaintiff.
The new Edwards settlement was “incredibly well-received,” Nagel said: No class members objected to the settlement terms, and only two class members opted out of the settlement.
Horizon did not object to Nagel’s fee petition of $9 million. Nagel Rice billed at hourly rates ranging from $550 to $850 for partners and $350 to $450 for associates.
The plaintiffs are Barbara Edwards, bankruptcy trustee for former plaintiff Roxbury Surgical Center, which declared bankruptcy, and North Jersey Ambulatory Surgical Center.
Nagel represented the class along with Robert Solomon of his firm and West Orange attorney Robert Prupis.
David Jay and Philip Sellinger of Greenberg Traurig in Florham Park represented Horizon Blue Cross Blue Shield. Jay referred a reporter’s questions directly to the client.
Horizon Blue Cross Blue Shield spokesman Tom Vincz responded with a statement.
“This was a long and protracted settlement in which the plaintiffs initially demanded many multiples of the final settlement amount,” according to the statement. “Over the years, litigants dropped out of the case and/or settled on their own. This settlement represents final closure of the matter.”
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