A Lucas County jury has issued a judgment of more than $28 million against a Perrysburg health-care management cooperative that undercut bidding procedures to land the city of Toledo’s contract to manage its employee health benefits.
The ruling Wednesday in Lucas County Common Pleas Court against FrontPath Health Cooperative and Arkansas-based HealthScope Benefits Inc. also entitles plaintiff Medical Mutual of Ohio to seven to 10 years’ worth of interest and fees exceeding $17 million, according to a statement from BakerHostetler, Medical Mutual’s law firm.
Medical Mutual had filed separate lawsuits in early 2022 against FrontPath and HealthScope on the heels of a $1.7-million jury verdict in 2021 from a previous lawsuit against FrontPath. Those separate suits were combined before the six-week trial argued before visiting Judge Richard J. McMonagle.
Several individually named defendants were voluntarily dismissed before the trial.
As a preferred provider organization, FrontPath was hired to manage Toledo’s self-funded health benefits and obtain volume discounts for medical providers and medications. As part of its bids, FrontPath used Healthscope, a wholly owned subsidiary of United Heatlhcare, as its third-party administrator responsible for processing and paying claims.
Cleveland-based Medical Mutual, which offered both the PPO and LPA services, successfully argued at trial that in their bids for the 2015 and 2018 city contracts, their competitors exaggerated the discounts they could provide by citing their largest percentages as typical rather than extreme. They also surreptitiously obtained bid information Medical Mutual provided to the city and used it to undercut Medical Mutual’s bids.
The result, Medical Mutual said, was that Toledo taxpayers ended up paying much more for city employees’ medical benefits than they otherwise would have.
“For us, the case has always been about the integrity of the bidding process and maintaining a level playing field for everyone,” Tony Helton, Medical Mutual’s president and chief executive, said in a separate statement issued Friday. “In its decision, the jury championed the values of transparency and fairness — and emphasized the unwavering importance of good stewardship of taxpayer dollars.”
The BakerHostetler statement said the jury had awarded $23 million in compensatory damages, $3.75 million for tortious interference with prospective business relations, and $1.3 million in punitive damages.
“This is the latest chapter in seven years of full-throttle litigation on behalf of Medical Mutual against competitors in this region,” said Richard Knoth, the plaintiff’s lead attorney, who described the trial as “one of the most difficult and contentious trials I have experienced in 40 years of experience.”
John McHugh III, a lawyer representing FrontPath in the case, did not respond Friday to a Blade inquiry.
Rachel Hart, a city of Toledo spokesman, said: “The city is reviewing the judgment, but was not a party to the lawsuit.”
Ohio law requires public employers to rebid services related to their self-funded health benefits every three years. Toledo awarded its current contract to Anthem Blue Cross Blue Shield in 2022 and is due to solicit new proposals this year.
First Published March 14, 2025, 8:43 p.m.
