Most consumers in the U.S. are aware of increasingly high medical costs. For most people, those high costs are not directly paid; instead, they appear on a bill along with what one’s insurance company will pay as part of an agreement with the medical provider. Many insured consumers will look for “in-plan” medical providers to ensure that most costs are covered. Those “in-plan” providers are part of a preferred provider organization (PPO), which is a subscription-based medical arrangement that allows a substantial discount on rates to be charged.
PPOs are organized by separate companies that generate revenue by charging an access fee. This type of PPO arrangement sets the backdrop for Best Comp, a recent case by the Louisiana Court of Appeals where plaintiffs sought class certification and defendants, the PPO, challenged it. The central evidence that plaintiffs presented for class certification was a data disc containing a Microsoft Excel spreadsheet showing the recommended discounts for each provider.
The plaintiffs were Opelousas-based healthcare entities representing healthcare providers who treated employees under the Louisiana Workers’ Compensation Act. The providers subscribed to PPO agreements with defendant Bestcomp, Inc., and alleged that Bestcomp discounted their billing without the notice required by statute La.R.S. 40:2203.1.
The trial court certified the class of healthcare providers and issued written reasons for certification. The court reasoned that commonality existed because all claims revolved around the issue of proper notice by Bestcomp. Also, the class could easily be identified through the data disc. Bestcomp appealed the certification ruling.
The Court of Appeals addressed several arguments raised by BestComp. The arguments all extensively revolved around the data disc. First, BestComps argued that the disc was not correctly entered into evidence nor authenticated.
In Louisiana, authentication occurs where there is evidence that the matter in question is what its proponent claims. The Court of Appeals found that the data disc was properly authenticated by the plaintiff’s office manager and another person who testified to the accuracy of the information.
BestComp further argued that the disc was never properly authenticated because the data disc does not qualify as a summary, and plaintiffs had entered it under the rule that applied to summaries. The Court rejected this argument, reasoning that the disc aligns with the purpose of the evidentiary rule—to provide a practical means of presenting voluminous evidence to the fact finder.
Concluding that the disc was properly admitted into evidence, the Court then turned to arguments regarding the class certification. First, the Court concluded that the trial court did err by focusing on potential claims, as the number of claimants is the critical information to consider in class certification. LA Code Civ Pro 591. The number of potential claimants, the Court found, is 349; this number was still so numerous that joining all members is impracticable. See LA Code Civ Pro 591.
Further, BestComp argued that the class representatives lack the typicality element to represent the class. Typicality involves determining whether an adequate relationship exists between the injuries to the plaintiff and class, so that the court may find a shared harm between those two. Baker v. PHC-Minden, L.P., 167 So.3d 528, 54. The Court found this element to be satisfied. Even though the claims would result in different monetary amounts, all claims were based on the same conduct and legal theory.
Finally, BestComp argued that imposing a $2,000 penalty for each infraction would be constitutionally prohibited. In considering whether a damage award or fine exceeds the limits of the Due Process Clause, the court looked at several factors that can be found in the BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996) opinion.
The Court explained that the Due Process issue did not require an individualized inquiry for each claim because proving the violation was common to all claims. The Court found that most factors would not support the argument that there was a Due Process violation. Most of the factors could also be generalized for the whole class. The only individualized question would be the disparity between the harm/potential harm suffered and the penalty imposed. However, the Court decided that this one individualized question was not enough to deny class certification.
In BestComp, the Louisiana Court of Appeals for the Third Circuit affirmed the trial court’s class certification. The Court’s opinion also showed the law’s attitude of preferring class certification when there are numerous potential claimants. Certainly, in terms of PPOs where all claims originate from the same violation in relation to discounts, there is sufficient commonality.
Class certification is a complex matter that involves highly specialized and skilled lawyers. The stakes can be high for class actions, so be careful to look for an experienced lawyer to advocate for your case.
Written by Berniard Law Firm Blog Writer: Elisabeth Tidwell
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