Lakin Chapman lawyers decided not to force American Family Mutual Insurance to scour 15 years of files from 11 states to identify class members in a class action.
Lakin Chapman dropped its insistence on a precise search after American Family estimated it would take a couple of years and cost about $1.2 million.
By way of compromise, Lakin Chapman will obtain lists of medical providers from a marketing firm and send letters to providers at American Family's expense.
Also, American Family will pay for notices in supplements to 700 newspapers.
Letters and notices will say, "If you have/had insurance with American Family Mutual Insurance Company, or if you are a medical provider, and submitted medical bills to American Family Mutual Insurance Company, this notice may affect your rights."
The letters will explain that a lawsuit in Madison County alleges that American Family improperly reduced medical payments.
They will also say that American Family denies wrongdoing or liability. And, the letter will say that those who satisfy the class definition belong to the class unless they request exclusion.
"As a class member, you will be bound by the court's orders and the judgment in this case (whether the class wins or loses) and give up your right to file your own lawsuit against AFI concerning the claims in this case.
"As a class member, you will be bound by all orders and judgments of the court, and any claims you may have against American Family will be resolved by any judgment in this case."
The former Lakin Law Firm sued in 2000, seeking recovery on claims since 1990.
Circuit Judge Daniel Stack certified a class action in Arizona, Idaho, Illinois, Indiana, Iowa, Missouri, Nebraska, Nevada, Ohio, South Dakota and Wisconsin.
Lakin Chapman lawyers pressed American Family to identify class members, and they filed a contempt motion when the insurer resisted.
For American Family, Anthony Martin of St. Louis answered that the insurer would have to examine 50,000 files from 1990 to 2005, prior to electronic storage.
"Several persons would have to be trained regarding the class definition and applicable claim criteria in order to conduct a file by file review," he wrote.
"The information necessary to determine class membership appears in multiple places in the files and will vary from file to file," he wrote.
Hiring temporary workers would allow persons outside the company to see private information, he wrote.
"It is reasonably believed that a class wide review could be completed in late 2011 or early 2012," he wrote.
He offered a conservative cost estimate of $1,178,843.20
Lakin Chapman withdrew the contempt motion.
At a hearing last month, Andrew Kuhlmann of Lakin Chapman told Stack both sides were working on a notice, "full speed ahead."
Stack said he wasn't sure those words should be used in this case.
The lawyers and the insurer filed their compromise on May 5.