LA: Court of Appeal Upholds $262M Judgment in PPO Case

The Louisiana Third Circuit Court of Appeal has upheld the $262 million judgment against First Health Group Corporation. Key findings include:

• The Preferred Provider Organization Act does not set out a prescriptive period for bringing an action for violation of the notice requirement of La. Rev. Stat. 40:2203.1.
• The action is personal in nature and is subject to a 10-year prescriptive period.
• First Health did not properly follow procedures and did not consider the constitutionality of the Act.
• The notice provision of the Act applies to all PPO agreements, including those used in workers' compensation matters.
• First Health's PPO agreements were not exempt from notice under the direct contract exception as the evidence did not show that First Health provided benefits through its own PPO or thorugh a direct provider agreement.
• First Health did not provide benefit cards and there was no evidence that First Health provided 30 days advance written notice.
• The damage award was upheld in this case.

The decision by the Third Circuit on the prescriptive issue creates a split in the appellate courts. It remains to be seen whether First Health will seek writs to the Louisiana Supreme Court and whether the high court will review the decision.

Read the decision