$40M Settlement Approved in Healthcare Consumer Fraud Lawsuit

This is a settlement for the Healthcare Fraud & Healthcare Whistleblower Lawsuits lawsuit.

New York, NY: Final approval of a consumer fraud class action settlement in Smith, et al v. Collinsworth, et al. has been obtained on behalf of approximately 48,000 consumers who were sold a limited benefit health insurance policy and a membership in a doctor discount program marketed as providing coverage that was as good or better than major medical, but who found out otherwise when they got sick and were saddled with large unpaid bills.

According to the Circuit Court of Saline County Arkansas, which approved the settlement, "the value of the settlement exceeds $40 million,"plus it "provides injunctive relief designed to address the gravamen of the claims at issue in this Action."The lawsuit has been in progress for seven years.

The lawsuit alleged that the health insurer and the doctor discount network, through their shared sales force, misrepresented the combination of a limited benefits health insurance policy and the doctor discount program as providing coverage that was equal to or better than major medical policies issued by companies such as Blue Cross Blue Shield. In fact the combination of products provided only a fraction of what would have been paid by major medical policy and left class members with crippling bills. The litigation class was certified in September 2009 by the Circuit Court of Saline County, Arkansas, and class certification was affirmed by the Arkansas Supreme Court in December 2010 in United Am. Ins. v. Smith (see 2010 Ark. 468 (2010)).