State agrees to settle Medicaid lawsuit after 15-year fight

SALT LAKE CITY — After 15 years of litigation and four trips to the Utah Supreme Court, state officials have tentatively agreed to settle a multimillion-dollar class-action lawsuit involving roughly 2,000 Medicaid claims.

Under the terms of the agreement, the state would pay $5.5 million to the class.

"It should have been settled years ago," said Robert Sykes, the attorney for the plaintiffs. "It just went on forever and ever."

The lawsuit involves personal-injury victims who had medical expenses covered by the state's Medicaid program. After the class members sued and recovered damages from various third parties, the state recuperated its expenses but failed to fully reimburse the recipients for attorneys' fees, which could be more than 33 percent of the total award.

"The state was shortchanging the recipients on a regular basis," Sykes said.

The terms of the settlement must be approved by the Utah Legislature and Gov. Gary Herbert. The Legislature appropriated $2.3 million earlier this year to a fund for the plaintiffs, and assistant attorney general Phil Lott said he expects lawmakers to consider appropriating the remainder of the settlement next year.

The lawsuit was one of the lengthiest cases Lott said he had ever been involved in. Earlier this year, Lott helped negotiate a settlement in an 18-year lawsuit against the state over its management of a Navajo trust fund.

The Utah Department of Health and the Office of Recovery Services were both defendants in the Medicaid lawsuit.

"It's been a complex case," Lott said of the class-action suit. "The state recognizes that it's a significant amount of money, but at the same time, we're talking about claims that go back into the early 1990s. ... The agreement we've reached is fair."

Sykes, however, said the state was guilty of "dragging its feet" during litigation. A number of plaintiffs died during the 15-year process, he said.

"It wasn't really that complicated," Sykes said. "But the state made it complicated."

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