Houston jury awards $19M to ER docs in dispute with Molina
Plaintiffs alleged that since 2016, Molina has been underpaying them for emergency room services for patients.
Before a jury trial that netted $19.1 million for the client, trial lawyer John Zavitsanos had an important assignment for 10 law clerks in his Houston firm.
The clerks methodically called from a list of 600 hotels to ask receptionists to connect them to the room of Ben Lynam, who works as chief actuary of Long Beach, California-based Molina Healthcare Inc.
Molina is the defendant that Zavitsanos’ clients—staffing companies for emergency room doctors—had sued, alleging they were being underpaid on claims for emergency room services.
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The attorney said he and other lawyers are representing doctors in similar cases against other insurance companies in Arkansas, Mississippi, Nevada, Florida and Georgia.
The prospect of calling 600 hotels might sound daunting.
Yet it took 30 phone calls to find Lynam’s hotel. Then the firm sent a process server to the hotel lobby to serve Lynam with a subpoena to testify as a witness in the trial, explained Zavitsanos, partner in Ahmad Zavitsanos Anaipakos Alavi Mensing.
Watch a video of serving Lynam
“We designate a villain in every trial. He was the villain in our trial. We always like to call the villain in our case in chief, if we are the plaintiff,” Zavitsanos said. ”He is the guy who set up the plan on how they would reimburse the emergency room doctors. He set it up in a way so they would pay the Medicare rate.”
He added that Molina’s attorneys had said they were unsure if they would call Lynam, but that Zavitsanos believed opposing counsel was hedging because the defense did not want the plaintiff to call Lynam first as an adverse witness.
“No question, the single most effective witness was Ben Lynam,” Zavitsanos said.
Defense attorney Craig Smyser, partner in Smyser Kaplan & Veselka in Houston, didn’t immediately respond to a call or email seeking comment.
In the litigation, plaintiffs ACS Primary Care Physicians Southwest PA and Emergency Services of Texas alleged that since 2016, Molina has been underpaying them for emergency room services for patients who had Molina’s HMO health plans purchased from the Affordable Care Act exchanges, said the first amended petition in ACS Primary Care Physicians Southwest PA v. Molina Healthcare of Texas Inc.
The plaintiffs had not entered contracts with Molina to accept discounted rates for its insureds, which means Texas law required the company to pay the “usual and customary rate” for services in the area. The doctor groups alleged the insurer gave them substantially less money for their services.
A Molina spokeswoman emailed a statement from the company.
“Molina works hard to provide its low-income members with access to reliable and affordable healthcare. As part of that mission, Molina diligently recruits emergency room doctors to join its network. When a Molina member is treated by an out-of-network doctor, Molina pays that doctor a fair, usual, and customary rate for those services,” said the statement. “In this case, Molina believes that the rate it paid to the plaintiff’s doctors was usual and customary, and it is clear that the jury has rejected the plaintiff’s exorbitant demands.”
The plaintiffs asked for $100 million in punitive damages, said a Law360 article.
The jury on June 24 found that the insurer didn’t pay the plaintiffs the usual and customary rate for emergency care, said the charge of the court in the case. Molina engaged in unfair, deceptive acts or practices by refusing the pay the right rate without doing a reasonable investigation, and by failing to use good faith to find a prompt and fair payment of claims, the verdict said. Jurors found that Molina had knowingly used unfair or deceptive practices.
The $19.09 million jury verdict was broken down by ACS winning nearly $1.40 million in actual damages and $12.5 million in punitive damages. Emergency Services won just over $188,000 in actual damages and $5 million in punitive damages.
Zavitsanos said that after the trial, some jurors told him that they wanted to give $50 million in punitive damages, but they were one vote short. Jurors compromised and lowered the punitive damages to $17.5 million, he said.
“It was late in the day. They wanted to go home,” he said. “It shows you how random this stuff can be sometimes.”