Medical Coders Receive $1.5 Million to Settle Misclassification Claims

From JDSupraRichard Reibstein reports that medical coders settled their misclassification for $1.5 million . Richard writes:

Aviacode, Inc., a leader in outsourced medical coding expertise, has agreed to pay $1.5 million to past and current coders to settle an IC misclassification class and collective action brought in federal court in Utah.  The named plaintiffs alleged that Aviacode violated the Fair Labor Standards Act and the Utah Payment of Wages Act, failed to pay the coders for all hours worked, including overtime, and did not reimburse them for business expenses, as a result of their misclassification as independent contractors and not employees.  According to the complaint, the company exerted “substantial control” over the coders by requiring them, among other things, to comply with specific coding guidelines; meet the company’s turnaround time requirements; maintain 95% coding accuracy measured by the company’s standards; maintain required certifications; complete the company’s required training; and agree to the company’s policies, including confidentiality, nondisclosure and non-solicitation. The complaint in this case further alleged that the coders were subject to the fee rate set by the company, did not bear any risk of loss, had little investment in the business, and were not engaged in an occupation or business distinct from the company’s. The filing seeking court approval of the settlement provided, “[a]lthough Class Counsel calculated potential damages of up to $8 million in a best-case-scenario analysis assuming favorable outcomes on all disputed issues of liability and damages at trial, the recovery of $1.525 million in this Settlement is a significant win for the Class given the financial uncertainties Defendant is facing combined with the uncertainties in the outcomes of the disputed legal and factual issues”.  Hazel v. AviacodeInc., No. 2:17-cv-01065 (D. Utah July 1, 2019).

Source: July 2019 Independent Contractor Misclassification and Compliance News Update | Locke Lord LLP – JDSupra

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