ffinrvr MOTION FOR APPROVAL OF UNITED STATES DISTRICT COURT SETTLEMENT WITH DEFENDANTS

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Avice Burke
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Case :1-cv-0-DLR Document 3 Filed /0/1 Page 1 of t (# 1e33) ERG, PLC 3 North Third Avenue Phoenix, Arizona 003 Telephone (0) l -0 Facsimile (0) -01 B. Lance Entrekin (# 11) lanc e(ò.entreki n aw.

1 Case :1-cv-0-DLR Document 3 Filed /0/1 Page 1 of t (# 1e33) ERG, PLC 3 North Third Avenue Phoenix, Arizona 003 Telephone (0) l -0 Facsimile (0) -01 B. Lance Entrekin (# 11) lanc e(ò.entreki n aw. c o m ffinrvr One East Camelback Road, # Phoenix, Arizona 01 Telephone (0) - Facsìmile (0) - Attorneys for Plaintffi UNTED STATES DSTRCT COURT FOR THE DSTRCT OF ARZONA Case No. :1-cv -0-PHX-DLR t 1 1 situated, Plaintiffs, MOTON FOR APPROVAL OF SETTLEMENT WTH DEFENDANTS SCOTTSDALE HEALTHCARE CORP. AND OHN C. LNCOLN VS 1 t 0 t Defendants. 3 Plaintiffs respectfully request this Court approve a settlement, in the form of a Consent udgment, with Defendants Scottsdale Healthcare Corp., now known as Scottsdale Healthcare Hospitals ("SHC") and ohn C. Lincoln ("CL") only. A copy of the proposed Consent udgment is attached hereto as Exhibit One.

2 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of 1 t t l 1 l t 0 l 3 BACK ]N) This class action case concerns the filing of healthcare provider liens, f,rled pursuant to A.R.S $$ thru -3, by hospitals against personal injury recoveries of Medicare Advantage ("M") patients who are enrolled in a Medicare Advantage Organization ("MAO") that paid the hospital under the terms of the MAO's plan. Plaintiffs contend that it is unlawful for the Defendant hospitals to file or assert healthcare provider liens against recoveries belonging to MA patients. Plaintiffs further contend that MA providers have signed contracts with MAOs agreeing not to engage in this practice and that Plaintiffs are the intended third-party beneficiaries of those agreements. Defendants deny all of the foregoing and have further asserted in a Motion to Dismiss that Plaintiffs have not asserted a case or controversy appropriate for declaratory relief because none of the federal authorities cited by Plaintiffs govem the conduct of Defendants. This Motion has been fully briefed and was joined by Defendant Dignity Health who is not a party to this proposed settlement. As this matter was only recently removed to this Court on une 30,01, a class has not yet been certified, and a motion for class certification is not practicable until some preliminary discovery has been completed. NF'ORMATON ABO THE SETTLEMENT The proposed Consent udgment settles all claims made against Defendants SHC and CL. n particular, the Consent udgment would (a) end the practice of "balance billing" MA patients, through the use of healthcare provider liens, after Defendants SHC or CL bill or receive payment from an MAO and (b) require SHC or CL to return any money paid to satisfy a healthcare provider lien which is inadvertently collected after the date of the Consent udgment. n terms of the differences between the class proposed in the Complaint and the settlement class, the proposed settlement includes all those individuals in Sub Class 1 -

3 Case :1-cv-0-DLR Document 3 Filed /0/1 Page 3 of a t t 1 T l l 0 l 3 (Complaint, T ), namely, those MA patients that are now subject to healthcare provider liens. The proposed settlement does not include relief for those individuals in Sub Class (Complaint, fl ), namely, those MA patients who have paid a sum of money to obtain a release of a healthcare provider lien in the past. An almost identical sub-class was proposed in the similar litigation, Winters v. Banner Health Network, CV0l-00, Maricopa County Superior Court. n that case, the trial court dismissed the claims of the putative sub-class on the grounds of accord and satisfaction. Although an appeal is pending for those parties, relief is uncertain.l The undersigned believe the proposed settlement is fair, adequate, and reasonable. The proposed settlement treats all putative class members equally relative to each other and, in fact, provides for 0% of the relief requested by Sub Class 1. SETTLEMENT ADMNSTRATON Sub Class 1 did not seek a monetary recovery and, since the essence of the proposed settlement is to effectively enter into injunctive relief that would preclude the "balance billing" practice that led to the filing of the underlying Complaint, Plaintiffs do not believe that formal settlement administration is necessary or appropriate. ndeed, the proposed settlement does not contemplate requiring submission of claims nor does it contemplate distribution of money, coupons, or vouchers. Likewise, to the extent the proposed settlement contemplates refunding money paid after the date of the Consent udgment, these refunds are not anticipated to be common or widespread and, the Plaintiffs believe, can be adequately addressed informally and on an individual basis. ndeed, the provision for refunding money contemplates that such money was accepted "inadvertently" and is merely a backstop to The only putative sub class representative in Sub Class is Frank Solano who paid $1,000 to have his lien released by Defendant CL. See, Complaint fl 0. Assuming the Court approves the proposed settlement, there will not be any putative sub class representatives to pursue a claim on behalf of Sub Class. 3

4 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of 1 a l0 ll t t l t 1 l 0 t 3 ensure there is an orderly procedure in place in the event that this issue arises. Plaintiffs obviously do not anticipate that money witl be inadvertently collected on a regular basis and that Defendants SHC and CL will implement internal procedures to inform appropriate personnel of the proposed Consent udgment to prevent this from occurring. NOTCE The Plaintiffs believe that notice can be adequately done in a more informal manner by publication of the Consent udgment through trial lawyer listservs and through salutary continuing legal education provided by the trial lawyers. The undersigned counsel, Geoffrey M. Trachtenberg, is an executive director of the Arizona Trial Lawyers Association and believes that appropriate notice can be accomplished through these efforts and will personally ensure that notice is provided to trial lawyers throughout the state by way of the foregoing means. n addition, for at least the next five () years, the undersigned counsel will provide a free copy of the Consent udgment on one or more websites provided for plaintiffs, lawyers and open to the public. These websites will include contact information so that attorneys or parties are able to contact the undersigned counsel in the event they have any questions about the proposed Consent udgment. ATTORNE YS'FEES The Consent udgment expressly contemplates that the Court will decide upon an appropriate award of attorneys' fees. Upon approval of this settlement andlor entry of the Consent udgment, the Plaintiffs will proceed to comply with Local Rules and file a formal application for attorneys' fees. Defendants do not believe Plaintiffs are entitled to an award of attorneys' fees and will oppose the Plaintiffs' application for attorneys fees. CON SON plaintiffs respectfully request the Court approve and enter the attached Consent udgment settlement with SHC and CL. Alternatively, Plaintiffs request the Court +

Case :1-cv-0-DLR Document 3 Filed /0/1 Page of a conduct a hearing to preliminarily approve the proposed settlement subject to any additional requests the Court deems appropriate.

5 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of a conduct a hearing to preliminarily approve the proposed settlement subject to any additional requests the Court deems appropriate. DATED this th day of October, 01. Lnvnxn.uM TRAcTTENBERG, PLC Trrn ENTNEKN LlW FrNVr /s/ Geoffrey Trachtenbers Geoffrey Trachtenberg 3 North 3'd Avenue Phoenix, AZ 003 stfa.ltiniurvlaw.com Attorneyfor Plaíntffi lslb. Lance Entrekrn B. Lance Entrekin One East Camelback Road, # Phoenix, AZ 01.com Attorneyfor Plaintffi 1t t l3 l l t l 1 0 t 3 CERTF'CATE OF SERVCE hereby certiff that on the th day of October, 01, electronically transmitted the attached document to the Clerk's Office using CMÆCF System for filing and transmittal of a Notice of Electronic Filing to the following CV/ECF registrants: Robert T. Sullivan, Esq. ames R. Broening, Esq. Alicyn M. Freeman, Esq. BnoBNrNc Onnnc \ilo-oos & Wrr-soN, P.C. 1 East efferson Street P.O. Box 0 Phoenix, Arizona03 Atto nts Scottsdale Hea ohn C. Lincoln Health Network Cameron Artigue, Esq. Chris Hering, Esq. Gnvrvr.cn & BURNHAM, PLC North Central Avenue, 1th Floor Phoenix, Arizona00 Attorneys for Defendant Digníty Health /s/ Lisa bini

6 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of EXHBT "))

Case :1-cv-0-DLR Document 3 Filed /0/1 Page of 1 l t 1 t 1 t 0 l 3 N THE LTNTED STATES DSTRCT COURT FOR THE DSTRCT OF ARZONA Bobby Aycock, an individual; Everett Sherwood, an individual; Candace

7 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of 1 l t 1 t 1 t 0 l 3 N THE LTNTED STATES DSTRCT COURT FOR THE DSTRCT OF ARZONA Bobby Aycock, an individual; Everett Sherwood, an individual; Candace Wright, an individual, oyce Carlisle, an individual, Lorraine Demello, an individual, and Frank Solano, an individual, on behalf of themselves and all others similarly situated, VS. Plaintiffs, Scottsdale Healthcare Co.p., an Arizona corporation; Dignity Health, a California corporation; and ohn C. Lincoln Health Network, an Arizona corporation, Defendants Case No. :1-v-0-PHX-DLR CONSENT UDGMENT This matter having come before the Court on a Stipulation for Entry of a Consent udgment, and the Court having reviewed the matter and finding good cause' T S HEREBY ORDERED, ADUDGED AND DECREED that: l. From the date of this Consent udgment forward, Defendants Scottsdale Healthcare Co.p., now known as Scottsdale Healthcare Hospitals ("SHC") and ohn C' Lincoln Health Network ("CL") are permanently enjoined (subject to the provisions of paragaph of this Consent udgment) -from f,rling or recording healthcare provider liens pursuant to A.R.S. $ et seq., for healthcare treatment or.services for which CL or SHC billed or received payment from a Medicare Advantage Organization (as def,rned by

Case :1-cv-0-DLR Document 3 Filed /0/1 Page of 11 t l3 t 1 t 1 t 0 l 3 Medicare Advantage statutes and regulations). Additionalty, CL and SHC shall not seek payment, pursuant to A.R.S. $ 33-31 et seq.

8 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of 11 t l3 t 1 t 1 t 0 l 3 Medicare Advantage statutes and regulations). Additionalty, CL and SHC shall not seek payment, pursuant to A.R.S. $ et seq., from any liability recovery, settlement or judgment proceeds for Medicare Advantage.enrollees on healthcare provider liens for healthcare treatment or services for which CL or SHC billed or received payment from a Medicare Advantage Organization that were filed or recorded prior to the date of this Consent udgment.. CL and SHC shall not be required to identiff and release any pending Medicare Advantage enrollee liens recorded prior to the date of this Consent udgment. f, however, a Medicare Advantage enrollee, or their representative, submits a written request (including a request by ) after the date of this Consent udgment that a lien be released pursuant to the terms of this Consent udgment, CL or SHC shall record a release within seven () calendar days of the request. Such requests may be ed to lien.servi ceslðicl.com 3. n the event CL or SHC inadvertently records a lien or accepts money to satisff a healthcare provider lien naming a Medicare Advantage enrollee after the date of this Consent udgment in violation of Paragraph 1 of this Consent udgment, upon written request (including a request by e- ) of the Medicare Advantage beneficiary; or their representative, CL and SHC shall release the lien and return any monies paid to satisff the lien within fourteen (1) calendar days of the request. Such requests may be sent in the same manner as provided in Paragtaph.. n the event the Medicare Advantage statutes or regulations are subsequently amended or an Arizona Court of Appeals, an Arizona District Court, the Ninth Circuit or the United States Supreme Court enters a decision allowing a healthcare provider to record and/or enforce healthcare provider liens against liability settlement proceeds, judgment proceeds, third party liabilities and/or recoveries from third parties, or for any other equitable reason under Federal Rules of Civil Procedure, Rule 0, SHC and CL may move

Case :1-cv-0-DLR Document 3 Filed /0/1 Page of t t 1 this Court to vacate this Consent udgment by stipulation of the parties, pursuant to Federal Rule of Civil Procedure 0 or by other available

9 Case :1-cv-0-DLR Document 3 Filed /0/1 Page of t t 1 this Court to vacate this Consent udgment by stipulation of the parties, pursuant to Federal Rule of Civil Procedure 0 or by other available remedy'. Plaintiffs' claims in this action against Defendants CL and SHC, including, but not limited to, breach of contract, declaratory relief and injunctive relief are hereby dismissed with prejudice.. The parties agree to submit to this Court for decision upon motion the issue of an award of attorneys' fees and costs.. The Court hereby directs that this Consent udgment be entered by the Clerk of the Court forthwith pursuant to Rule (b), Fed.R.Civ.P. The direction of the entry of f,rnal judgment pursuant to Rule (b) is appropriate and proper because this Consent udgment fully and finally adjudicates each and every claim by Plaintiffs against Defendants CL and SHC. This consent udgment does not, however, resolve matters concerning Defendant Dignity Health. DATED: October,01. t 1 Douglas L. Rayes United States District udge T 0 l 3

SUPERIOR COURT OF ARIZONA

SUPERIOR COURT OF ARIZONA Michael K Jeanes, Clerk of Court *** Electronically Filed *** T. Hays, Deputy //0 ::00 PM Filing ID 00 0 0 B. Lance Entrekin (#) THE ENTREKIN LAW FIRM One East Camelback Road, #0 Phoenix, Arizona 0 (0)