United States District Court, S.D. Mississippi, Southern Division
MULTIPLAN, INC. and PRIVATE HEALTHCARE SYSTEMS, INC. PLAINTIFFS/ COUNTER-DEFENDANTS
STEVEN W. HOLLAND, doing business as Physical Therapy Clinic of Gulfport DEFENDANT/ COUNTERCLAIMANT
MEMORANDUM OPINION AND ORDER GRANTING THE
PLAINTIFFS' MOTION FOR JUDGMENT AS A MATTER OF
GUIROLA, JR. UNITED STATES DISTRICT JUDGE.
THE COURT is the  Motion for Judgment as a
Matter of Law, or in the Alternative, for New Trial, filed by
the plaintiffs/counter-defendants Multiplan, Inc. and Private
Healthcare Systems, Inc. For the following reasons, the Court
finds that Multiplan and PHCS are entitled to judgment as a
matter of law as to Holland's breach of contract claim.
Multiplan and PHCS's Motion for New Trial is moot.
lawsuit arose out of a dispute between Holland, a physical
therapist, and two preferred provider organizations (PPOs),
PHCS and Multiplan. Holland entered into a “PHCS
Participating Professional Agreement” with PHCS, which
had an effective date of September 1, 2006. The Agreement
contains the following requirement for steerage, which is
also known as direction:
4.5 Marketing. PHCS will require each Payor to make
available and promote Contracts which provide Direction to
Preferred Providers. Direction may occur through, but is not
limited to, (i) greater plan benefits, (ii) access to lists
or directories of Preferred Providers in printed form or by
phone or website, or (iii) the provision of financial
incentives that provide Covered Individuals with savings when
they obtain health care services from Preferred Providers.
(Trial Ex. P-1 § 4.5). The Agreement defines the term
“Payor” as “an insurance company, employer
health plan, Taft-Hartley Fund, or other organization liable
to pay or arrange to pay for the provision of health care
services to Covered Individuals through a PHCS provider
network.” (Id. at § 1.5). The term
“Covered Individual” is defined as “any
individual and/or dependent covered by a Contract.”
(Id. at § 1.3). “Contract”
“means any insurance policy, benefit plan or other
health plan or program that includes Direction (as defined in
Section 4.5) to Preferred Providers.” (Id. at
October 18, 2006, Multiplan acquired PHCS as a wholly owned
subsidiary. On or about June 26, 2007, PHCS sent a letter to
Holland stating that Multiplan had acquired PHCS on October
18, 2006, and that PHCS was “expanding [Holland's]
PHCS relationship to include participation with Multiplan on
a complementary basis.” (See Trial Ex. P-2).
Multiplan subsequently entered into contracts with companies
called Coventry and Procura. (Trial Ex. P-24, P-25). Holland
has argued throughout this litigation that PHCS and Multiplan
wrongfully applied Holland's discount rate to
workers' compensation claims pursuant to Multiplan's
agreement with Coventry and Procura. Holland claims that
these discounts constituted a breach of contract, because his
contract with PHCS required insurers to provide direction or
steerage of patients but Mississippi workers'
compensation statutes and regulations effectively eliminate
direction or steerage. Holland retained Kevin Barrett, doing
business as Quest Financial Recovery Services, to assist him
in disputing the discounts.
August 13, 2014, Multiplan and PHCS filed this lawsuit
against Holland and Barrett, asserting a tortious
interference with business relations claim due to Holland and
Barrett's communications with the clients of PHCS and
Multiplan. Holland asserted the following counterclaims
against Multiplan and PHCS: violations of RICO, Unjust
Enrichment, Civil Conspiracy, Common Law Fraud, Accounting,
Disgorgement, and Breach of Contract. (3d Am. Countercl., ECF
No. 106). On July 25, 2016, this Court issued a 
Memorandum Opinion and Order dismissing Holland's RICO,
unjust enrichment, common law fraud, and accounting claims
pursuant to Fed.R.Civ.P. 12(b)(6). In a  Memorandum
Opinion and Order, this Court granted summary judgment in
favor of Multiplan and PHCS as to Holland's disgorgement
Court granted judgment as a matter of law as to Multiplan and
PHCS's claim for tortious interference with business
relations against Holland. (Mem. Op. & Order, ECF No.
289). This Court also granted judgment as a matter of law in
favor of Multiplan and PHCS as to Holland's civil
conspiracy counterclaim. (Mem. Op. & Order, ECF No. 290).
Following a five-day trial, a jury found in favor of Holland
as to his breach of contract claim. Pursuant to the
parties' stipulation as to the amount of contractual
damages, this Court entered a  Judgment awarding Holland
$14, 329.25. Multiplan and PHCS now seek judgment as a matter
of law as to Holland's breach of contract claim, or in
the alternative, a new trial.
may grant judgment as a matter of law if “the court
finds that a reasonable jury would not have a legally
sufficient evidentiary basis to find for the party on that
issue.” Fed.R.Civ.P. 50(a)(1). “In resolving such
challenges, we draw all reasonable inferences and resolve
credibility determinations in the light most favorable to the
nonmoving party.” Foradori v. Harris, 523 F.3d
477, 485 (5th Cir. 2008).
Mississippi law, the elements of a breach of contract are (1)
the existence of a valid and binding contract and (2) breach
of the contract by the defendant. Bus. Commc'ns, Inc.
v. Banks, 90 So.3d 1221, 1224-25 (¶¶ 10-11)
(Miss. 2012). It is undisputed that the parties had a valid
and binding contract; thus, the only question remaining as to
Holland's counterclaim concerns whether a reasonable jury
could have found that Multiplan and PHCS breached the
contract by providing improper discounts. As explained
previously, Holland claims that the discounts were improper
because no steerage or direction was provided for
workers' compensation claims.
Holland conceded during his testimony at trial that the PHCS
contract merely provides an opportunity for steerage; thus,
there are no guarantees that a provider will receive
additional patients pursuant to the PHCS contract.
Furthermore, Jon Wampler, an insurance expert retained by
Multiplan and PHCS, testified that steerage is provided in
the workers' compensation setting, because physicians
typically refer their patients with health insurance and
their patients with workers' compensation coverage to the
same specialists and physical therapists. As a result,
physicians typically have one referral network for all of his
or her patients, and the physicians are
contractually-obligated to refer patients to in-network
providers where possible. Mr. Wampler also explained that
Mississippi's workers' compensation law allows
managed care companies to assist patients in obtaining
referrals to in-network specialists in certain circumstances.
also argues that Multiplan and PHCS breached the contract by
permitting additional companies to join the network without
his consent. However, as Mr. Wampler testified, the contract
permitted the unilateral addition of clients to the network,
because it provides, “Upon written notice to
Participating Professional, PHCS will, in its sole
discretion, designate those individual product(s) for ...