Farmers Settles Medical Reimbursement Class Action Suit

By | August 9, 2011

Farmers Insurance announced late last week that it had agreed to settle a nationwide class action lawsuit regarding the medical bills of persons involved in car accidents.

The settlement may affect Farmers policyholders, or those who were being paid for by a Farmers policy, who filed claims for medical coverage. The case was filed in the District Court of Canadian County, Oklahoma, in 2004.

The plaintiffs alleged that Farmers process of reviewing the amount that was billed for medical care, and then reducing or denying payment if the amount exceeded the 80th percentile of charges for that service, was wrongful and a breach of contract.

In court, Farmers maintained that this practice resulted in a benefit to the policyholders because the reduced payment was usually accepted by the medical provider, and it left the policyholder with more room before they ran up against the limit of coverage.

In agreeing to settle, Farmers denied any wrongdoing. It said it was settling to “avoid the burden and expense of continued litigation.”

The settlement class is all persons who submitted a claim for medical bills related to a car accident under Medical Payments (Med-Pay) coverage or Personal Injury Protection (PIP) coverage and had their claim reduced by Zurich Services Corp. between January 2001 and early February 2009.

Settlement claims will pay 60 percent of the difference between the amount of the bill submitted to Farmers for payment and the reduced amount actually paid.

Individuals who believe they may be part of the group can go to www.MedpayClaimsAdministration.com or call 1-877-846-0588.

Farmers director of media relations, Jerry Davies, said that the company could not release an estimate of the total amount it expects the settlement to cost or how many policyholders will file a settlement claim.

A phone call to the lead attorney for the plaintiff group, Rick Bisher, of Oklahoma City, was not returned.

The announcement that Farmers made of the settlement was required by the agreement.

Topics Lawsuits Agribusiness Policyholder

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