A federal judge on Monday gave final approval to a $350 million class action settlement with UnitedHealth Group Inc., awarding $89 million in attorney fees and expenses along the way.
Southern District of New York Judge Lawrence M. McKenna endorsed a motion by lawyers for the plaintiffs at Pomerantz Haudek Grossman & Gross to grant final approval of the settlement, which resolved claims that the health insurer colluded with others to underpay doctors outside of its network. The judge also awarded 25 percent of the cash settlement fund, or $87.5 million, in fees, as well as $1.5 million in expenses.
"The fees and expenses and compensatory awards are reasonable in light of the complexity of the case and the result," McKenna wrote.
The settlement in The American Medical Association v. United Healthcare Corporation, 00-cv-2800, came in a suit commenced in 2000 by the American Medical Association and other medical groups, providers and patients seeking relief for physicians who were harmed by UnitedHealth's use of a database to determine payments for out-of-network doctors.
An investigation by New York Attorney General Andrew Cuomo resulted in UnitedHealth agreeing in January 2009 to a $50 million settlement and the closure of the database, which Cuomo at the time said resulted in "unfair reimbursements" to patients. The class action settlement, announced two days later, also required the end of the database but on a national basis.
McKenna unsealed his preliminary approval of the settlement in December. Another $12 million will be added in interest, according to the motion McKenna approved Monday. The attorney fees will be split among lead counsel Pomerantz Haudek and other firms.
D. Brian Hufford, a partner at Pomerantz Haudek, said his side was "thrilled to have it come to an end in what we believe is an exceptional settlement." UnitedHealth, represented by Jeffrey Klein at Weil, Gotshal & Manges, in a statement said it was "pleased to have final approval of the settlement."