Multimillion Dollar Class Action Litigation Resolved for Medical Providers
Shook achieved a full, global settlement of the long-running Highlands Physicians v. Wellmont Health System class action litigation, in which Shook represented the named plaintiff, Highlands Physicians, Inc. (HPI) and the class, a trade association of about 1,500 medical providers in Tennessee and Virginia. Through the settlement, HPI and the class will receive $75.7 million in cash, as well as other benefits, in exchange for ending the litigation and ending the physician-hospital network whose operations led to the litigation. Another $7 million will be paid into the physician-hospital network, control of which will be transferred to HPI to form a new health network in the area.
The settlement follows an approximately $58 million jury verdict achieved by Shook in 2018, which was affirmed on appeal in 2020, with Wellmont’s subsequent application for leave to appeal denied by the Tennessee Supreme Court. Even after attorneys’ fees and costs are paid, class members will receive about 90% of the jury verdict through distributions from the settlement fund established through the settlement, plus substantial benefits to physicians that HPI anticipates will be available through the new health network. HPI is optimistic that the new network will increase health care options and improve health care outcomes in the communities it serves.
HPI retained Shook in 2015 for what was then viewed as a contract dispute between HPI and Wellmont over the operations of a jointly run health care network. Led by Gary Elden, the Shook team determined that Wellmont’s actions were depressing reimbursement rates for health care practitioners across the region. Shook filed a class action on behalf of HPI and its past and present members, seeking damages for all of them. The class was certified in 2016, and the certification was affirmed by the Tennessee Supreme Court in 2017, then affirmed again by the Tennessee Court of Appeals in 2020. The case was tried as a class action in November and December 2018.
The litigation team consists of Partners Gary Elden, Matt Wolfe, Amy Cho, Associate Peter O’Neill and Consultant Marty Behn.
The case is Highlands Physicians, Inc. v. Wellmont Health System, 625 S.W.3d 262 (Ct. App. Tenn. 2020). (Parties’ Joint Motion for Final Approval of Class Settlement, August 12, 2021.)