Sunrise, Humana reach settlement

A multimillion dollar settlement has been reached in a lawsuit involving Sunrise Hospital and Medical Center and its former owner, Humana Health Insurance.

The settlement, announced Wednesday, will award $11.9 million to about 13,000 patients who made co-payments when they were hospitalized at Sunrise from 1984 to 1988.

Also, employers who offered Humana insurance to its employees who were hospitalized during that period were awarded $4.1 million. Humana must pay an additional $900,000 in court costs and $11.8 million in attorneys' fees.

The lawsuit was filed in 1989 and involved about 84,000 Nevada patients. It stemmed from an agreement Humana had with patients entering Sunrise in which it would pay 80 percent of the bills and the patients would pay 20 percent.

Humana and Sunrise, however, had a discount agreement in which the insurance company paid lower rates. The savings were not passed on to the patients.

The class-action lawsuit had been appealed all the way to the U.S. Supreme Court, where it was ruled that the federal racketeering law (RICO) could be used against the insurer and the hospital.

It was never applied in this case, Will Kemp, one of the attorneys representing the patients, said. But if it had, Humana and Sunrise could have been ordered to pay triple damages.

"We are really happy to get this settled and get money to the patients and premium payors (employers)," Kemp said Wednesday.

Kemp said the settlement is expected to be approved by U.S. District Judge David Hagen in November, and payments should be mailed out to former patients by January.

Kemp said there are about 64,000 former patients still living and about 930 employers who will receive money.

Settlement notices, he said, will be mailed out around the second week in September.

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