Jury Awards Medical Mutual in Lawsuit that Detailed Others Manipulation of Public Bid Process

CLEVELAND, Ohio — A jury sided with Medical Mutual on Oct. 1 and awarded the insurer $1.7 million in damages in a lawsuit against FrontPath Health Coalition that revealed the theft of pricing information and other wrongdoing in competitive bid processes involving local governments in Northwest Ohio.

The lawsuit against Perrysburg-based FrontPath, which Medical Mutual filed in June 2017, was heard in Lucas County Common Pleas Court.

The lawsuit focused on the bid process of contracts with the city of Toledo and Wood County, Ohio — contracts that have affected the health insurance of thousands of public employees for more than a decade. The suit included public bids for both PPO network services and third-party administration contracts.

Expert witnesses at the monthlong trial testified that the awarding of contracts to FrontPath and the failure to put other contracts out to bid cost the local taxpayers millions of dollars annually.

At the heart of the trial was the strategy of FrontPath and its partner Healthscope, a wholly owned subsidiary of UnitedHealth, to thwart Medical Mutual’s efforts to obtain public healthcare contracts in the region’s self-insured market. Evidence and testimony revealed FrontPath’s tactic of recruiting to its board of trustees public officials who then assisted FrontPath in gaining access to financial information Medical Mutual submitted in public bids. FrontPath then used the information to manipulate the bid process to FrontPath’s advantage. Financial information submitted in the public bid process is required to remain confidential.

The trial revealed that some public officials even stole internal records during their government entity’s bid deliberations and turned the records over to FrontPath, despite being prohibited under Ohio law.

Evidence at the trial also showed that FrontPath kept secret the identity of its board members. The organization only revealed their identities when forced to do so during the pre-trial process.
In addition, Medical Mutual showed that FrontPath overstated its provider discounts in the Northwest Ohio market, including with the city of Toledo since 2015. Witnesses testified that FrontPath’s bids overstated its discounts by up to $13.3 million annually.

“We are elated with the jury’s decision,” said Rick Chiricosta, Medical Mutual’s Chairman, President and Chief Executive Officer. “We are proud to have brought this information to light. It’s a win for all who value transparency, and it’s especially meaningful for Northwest Ohio’s public employees and taxpayers. Our priority was always about creating a level playing field.”

About Medical Mutual of Ohio

Founded in 1934, Medical Mutual is the oldest and one of the largest health insurance companies based in Ohio. We provide peace of mind to more than 1.5 million Ohioans through our high-quality health, life, disability, dental, vision and indemnity plans. We offer fully insured and self-funded group coverage, including stop loss, as well as Medicare Advantage, Medicare Supplement and individual plans. Medical Mutual’s status as a mutual company means we are owned by our members, not stockholders, so we don’t answer to Wall Street analysts or pay dividends to investors. Instead, we focus on developing products and services that allow us to better serve our customers and the communities around us and help our members achieve their best possible health and quality of life.