Preferred Provider Organization (“PPO”) litigation in Louisiana

(Client: Liberty Mutual)

Our firm has obtained favorable rulings from the U.S. Fifth Circuit and the LA Supreme Court in ongoing Preferred Provider Organization (“PPO”) litigation in Louisiana where medical providers have sought hundreds of millions of dollars from employers and their insurers. The litigation involves medical providers who have joined a PPO network comprised of payors who themselves directly contract with the PPO to join the network and process and pay the bills.  In exchange for joining the network and having increased access to patient referrals, the providers agree by contract to charge and be paid discounted rates, including rates lower than the workers compensation fee schedule.  Unsatisfied with the payment terms in their contracts, hundreds of Louisiana providers bombarded the Louisiana Office of Workers Compensation (“OWC”) with thousands of claims against employers and payors, alleging they were underpaid for services on workers compensation claims, and seeking tens of millions of dollars in penalties and attorney fees. In addition, medical providers have asserted class actions in state court, seeking tens of millions of dollars in penalties for alleged violations of the Louisiana Any Willing Provider Act for failure to provide certain notice to the providers when presenting a workers compensation claim. In response, Barrasso Usdin, on behalf of its insurer clients, has vigorously defended the claims, arguing in a federal district court declaratory action and in state workers compensation cases that the providers were not entitled to monies beyond the payment terms set forth in their PPO contracts, and certainly not penalties and attorney fees. After oral argument presented by Judy Barrasso for the defendant insurer, the Louisiana Supreme Court issued a favorable ruling, holding that the PPO contracts are enforceable, not violative of state statutes or public policy, and no additional monies or penalties and attorney fees were due from insurers. Agilus Health v. Accor Lodging, 2010 WL 4845732 (La. Nov. 30, 2010).  The decision set a precedent impacting thousands of pending cases.

The firm successfully presented related arguments to the U.S. Fifth Circuit Court of Appeal.  Agreeing with our arguments in brief and during oral arguments, the Fifth Circuit found that the providers were not entitled to any additional monies, penalties, or attorney fees and upheld injunctions preventing the providers from bringing and/or pursuing claims against our client. Liberty Mutual v. Gunderson, 387 Fed. Appx. 480 (5thCir. 2010); Liberty Mutual v. Gunderson, 305 Fed. Appx. 170 (5th Cir. 2008).  Judy Barrasso argued before the Fifth Circuit.

Partners Judy Barrasso and Michael Balascio continue to litigate these PPO issues for insurers in state and federal courts inside and outside of Louisiana.