Humana settles lawsuit with Nevadans for $28.8 million

Wednesday, Dec. 1, 1999 | 10:43 a.m.

A decade-old lawsuit that claimed Humana Sunrise Hospital and its insurance arm bilked patients in a rate scheme has been settled for $28.8 million.

A federal judge gave final approval Tuesday to the settlement, which was actually agreed upon in July after the U.S. Supreme Court ruled the plaintiffs could sue for triple damages under federal racketeering laws.

The suit claimed 84,000 Nevada patients and employers were cheated in a rate scheme by the hospital and Humana Health Insurance that sometimes forced patients to pay more than the insurance company for their hospital care.

U.S. District Judge David Hagen gave his preliminary approval in September for the agreement in the Humana case. He made the settlement final Tuesday after concluding it "is fundamentally fair, adequate and reasonable."

The defendants settled the case, which was filed in March 1989, without admitting any wrongdoing.

An amended lawsuit filed in the case in 1991 accused Humana Hospital Sunrise and Humana Health Insurance of defrauding Nevada patients and employers out of $140 million from 1984 through 1988. The Las Vegas hospital has since been acquired by Columbia/HCA.

The lawsuit claimed Humana Inc., through its subsidiary insurance company, secretly negotiated an 89 percent discount with its hospital, Humana Hospital Sunrise, but did not pass the savings onto its customers.

Under the negotiated policy, patients were required to pay 20 percent of the final bill, with the insurance company paying 80 percent. But with its discount, the insurance company often paid less than the patient.

The patients who filed the lawsuit claimed this constituted racketeering under federal law because the company intentionally misled its customers by claiming it was paying 80 percent of the total bill.

Attorneys said about 60,000 patients and employers are eligible to receive money from the lawsuit settlement. Among the plaintiffs in the case were personnel of the Clark County School District.

They have until Jan. 30 to file their claims.