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A class action lawsuit against Oxford Health Plans Inc., charged with breach of contract and deceptive trade practices with subscribers under New York State law, was settled last week under which the health provider is expected to pay 100 percent damages to the plaintiffs.
The Supreme Court of New York said in an order on June 5 that it has found the settlement, on a preliminary basis, "to be fair, reasonable and adequate and in the best interests" of the parties involved.
Although the court order did not give the terms of the settlement, the attorney for the plaintiffs, Krishnan Chittur, said that by it the plaintiffs will get 100 percent of the damages recoverable under law as well as attorneys' fees and expenses. "Besides, the individuals who brought this action -- class plaintiffs -- will get $7,500 each for their efforts that benefited the class," Chittur told India Abroad.
The case was originally filed in 1996 by three people, one of whom, Anastasia Makastchian, alleged that she was notified by the company that her insurance had been terminated the day before she was scheduled to deliver her baby through Caesarian section. The termination was retroactive to four months earlier which meant that she was responsible for all medical bills incurred in that time.
The plaintiffs argued that, as with most other insurance policies -- fire, home -- they deserved to receive 30-days notice before being terminated. Oxford contended that it was not required to give the plaintiffs notice of termination when the reason was non-payment of premiums.
The Appellate Division of the Supreme Court last year upheld a trial court's decision that the health provider's practice of terminating policies without providing notice was a violation of the terms of the policy. "We also agree with the trial court that defendants may have engaged in deceptive practices that would cause subscribers to believe that they still had health insurance when coverage had already been canceled," the court said last year.
In response to the court ruling, Oxford revised its practices and started giving advance notice of termination of coverage. Its revised practice was approved by the court. "That revision of practice was a tremendous benefit to the class," said Chittur. Damages then had to be determined for those subscribers whose coverage had been terminated earlier. That is covered by the present settlement.
In its decision giving preliminary approval to the settlement of June 5, Justice Ira Gammerman of the Supreme Court said that a hearing will be held on July 24, when objections, if any, to the settlement will be heard before the court gives its final approval to the settlement.
Chittur said that the July hearing should be a legal formality as hardly anybody was expected to raise objections to the settlement. Asked how much the settlement would entail in monetary terms, Chittur could not give any specific figures. "I believe it may run into six figures," he said.
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