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Arbitration Panel Grants Preliminary Approval of New York Physician Class Settlement of Claims Against Oxford Health Plans LLC and Oxford Health Plans (NY), Inc. for $22 Million



Thursday, December 6, 2012
Contact: Edith Kallas (212-447-7019)




Arbitration Panel Grants Preliminary Approval of New York Physician Class Settlement of Claims Against Oxford Health Plans LLC and Oxford Health Plans (NY), Inc. for $22 Million


NEW YORK CITY – Whatley Kallas LLP, representing a certified class of physicians in the State of New York and the Class Representative, Claimant Robert Scher, M.D., announced that the panel of the American Arbitration Association (“AAA”) hearing their class arbitration against Oxford Health Plans LLC and Oxford Health Plans (NY), Inc. (together, “Oxford”) has granted preliminary approval of the parties’ proposed settlement.  If the settlement receives final approval after members of the class (who had contracts with Oxford) have been notified, Oxford will pay $22 million and give a release to class members in exchange for the release of the class members’ claims arising out of Oxford’s in-network claims payment practices. The parties reached settlement just days before they were scheduled to try the merits of the case before the panel in a two-week arbitration hearing.


The state-wide class arbitration that is being settled, Scher v. Oxford Health Plans, Inc., AAA Case No. 11 193 00548 05 (the “Arbitration”), challenges Oxford’s allegedly wrongful use of automated claims adjudication software to process participating physicians’ claims for reimbursement in ways that were inconsistent with industry standards, statutory requirements, and the contractual obligations that Claimant asserts Oxford owes physicians who participate in its provider networks in New York State. 


Dr. Scher, along with two other physician plaintiffs, originally filed a complaint against Oxford in New York State Supreme Court back in 2001, asserting these same claims and others in an action entitled Cheng v. Oxford Health Plans, Inc., Index No. 604083/01 (the “Litigation”).  In 2005, following certain rulings in the Litigation, including an order sending the claims to arbitration, Dr. Scher initiated the Arbitration against Oxford before the AAA in New York.  Since the Arbitration Demand was filed, substantial proceedings have occurred, including the certification of the Arbitration class, repeated unsuccessful challenges to that certification by Oxford, the production of a significant number of documents by the parties, depositions of various witnesses, extensive damages analyses, the filing of expert reports, and substantial pre-trial preparation. 


“After more than a decade of hard-fought litigation and arbitration, this is a true victory for Oxford’s participating physicians in New York,” said Edith Kallas, a partner at Whatley Kallas, who has represented Dr. Scher and the class since the original litigation’s inception.  “We are very pleased with this result.


Don Moy, counsel to the Medical Society of the State of New York (also known as “MSSNY”), has been involved in the litigation and arbitration against Oxford since the Litigation was first initiated, along with a companion action against Oxford by MSSNY, back in 2001.  Mr. Moy commended Dr. Scher for his hard work, dedication, courage and fortitude in pursuing the class arbitration and prior litigation against Oxford, and in seeing that physicians have recourse to combat abuses by managed care plans.  Said Mr. Moy, “Dr. Scher worked tirelessly to advocate on behalf of the interests of the medical profession and patients served by the medical profession, and both he and Class Counsel are commended for this far-reaching achievement.”


A copy of the full Settlement Agreement is available here. Additional background information on the case and the proposed settlement, as well as the Notice of Proposed Settlement of Class Arbitration, Claim Form and Claim Form Instructions, will be available online at and by December 21, 2012.