NOTICE OF PENDING CLASS ACTION AND PROPOSED SETTLEMENT

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1 Karen Washington v. Key Health Medical Solutions Inc. NOTICE OF PENDING CLASS ACTION AND PROPOSED SETTLEMENT READ THIS NOTICE FULLY AND CAREFULLY; THE PROPOSED SETTLEMENT MAY AFFECT YOUR RIGHTS! IF YOU PAID MONIES TO KEY HEALTH MEDICAL SOLUTIONS INC. PURSUANT TO AN ASSIGNMENT OF PROCEEDS OR LIEN AGREEMENT IN A GREATER AMOUNT THAN WHAT YOUR MEDICAL SERVICE PROVIDER CHARGES FOR THE SAME MEDICAL DIAGNOSTIC IMAGING SERVICES. RECORDS INDICATE THAT YOU MAY BE A MEMBER OF THE CLASS. The Superior Court of California has authorized this Notice; it is not a solicitation from a lawyer. SUMMARY OF YOUR OPTIONS AND THE LEGAL EFFECT OF EACH OPTION APPROVE THE SETTLEMENT AND RECEIVE A PAYMENT; YOU NEED NOT DO ANYTHING Unless you exclude yourself from the Settlement (see the next paragraph), then you will receive a payment. The approximate amount of the payment you will receive and when you will receive it is described below. EXCLUDE YOURSELF FROM THE SETTLEMENT: GET NO PAYMENT BUT RELEASE NO CLAIMS You can choose to exclude yourself from the Settlement or opt out. This means you keep your individual claims against Defendant Key Health Medical Solutions Inc., but you will not receive a payment. To recover against Key Health Medical Solutions Inc., you will have to file a separate case. OBJECT TO THE SETTLEMENT You can file an objection with the Court explaining why you do not like the Settlement. If your objection is overruled by the Court, you will receive a payment but you will not be able to sue Key Health Medical Solutions Inc., for the claims asserted in this litigation. If the Court agrees with your objection, then the Settlement may not be approved or may have to be modified. These rights and options and the deadlines to exercise them along with the material terms of the Settlement are explained in this Notice. KHWNOT1

2 BASIC INFORMATION 1. What is this lawsuit about? The lawsuit that is being settled is entitled Karen Washington v. Key Health Medical Solutions Inc., California Superior Court, County of Los Angeles BC The case is a class action. That means that the named plaintiff, Karen Washington, is an individual who is acting on behalf of all persons who paid monies to Key Health Medical Solutions Inc. ( Key Health ) pursuant to an assignment of proceeds or lien agreement in a greater amount than what their medical service provider would have charged for the same medical diagnostic imaging services at the time such services were rendered (this group is called the Class Members ). Ms. Washington claims that she and all other Class Members were subject to improper inflation of the amount due on Key Health s liens. She has claims for violations of the California s Unfair Competition Law and various state law claims. 2. Why did I receive this Notice of these lawsuits? You received this Notice because Key Health s records indicate that you paid monies to Key Health pursuant to an assignment of proceeds or lien agreement in a greater amount than your medical service provider would have charged for the same medical diagnostic imaging services at the time such services were rendered during the class period, which is November 17, 2007 through January 12, The Court directed that this Notice be sent to all Class Members because each Class Member has a right to know about the proposed Settlement and the options available to him or her before the Court decides whether to approve the Settlement. 3. Why did the parties settle? In any lawsuit, there are risks and potential benefits that come with continuing to trial versus settling at an earlier stage. It is the named plaintiff s lawyers job to identify when a proposed Settlement offer is good enough that it justifies recommending settling the case instead of continuing to trial. In a class action, these lawyers, or Class Counsel, make this recommendation to the named plaintiff. The named plaintiff has the duty to act in the best interests of the class as a whole, and in this case, it is his belief, as well as Class Counsel s opinion, that this Settlement is in the best interest of all Class Members for at least the following reasons: First, Key Health provides a service that necessarily requires some degree of price increase from the Key Health purchase price of the medical receivable in order to stay profitable. Since this lawsuit, Key Health has changed their standard contract to make terms of payment more clear to the patient. This lawsuit shed light on an issue that affected Class Members, and caused Key Health to change its practices. The Settlement would see Class Members compensated for some of the overages they paid. Second, by settling, the Class Members will avoid the risks and delays associated with further litigation. If the case proceeds to trial, Key Health might win, which means there will be no recovery for Class Members. Even if the named plaintiff were to win, there is no assurance that the Class Members will be awarded more than the current settlement amount and it may take years before a payment is made. WHO IS IN THE SETTLEMENT 4. How do I know if I am part of the Settlement? If you received this Notice, then Key Health s records indicate that you are a Class Member who is entitled to receive a payment

3 YOUR OPTIONS 5. What options do I have with respect to the Settlement? You have three options: (1) participate in the Settlement; (2) exclude yourself from the Settlement ( opt out of it); or (3) remain as a Class Member and participate in the Settlement but object to it. Each of these options is described in a separate section below. 6. What are the critical deadlines? To participate in the Settlement, you need not do anything; so long as you do not opt out or exclude yourself, a payment will be mailed to you at the address on the Notice postcard you received, if you received one. The deadline for sending a letter to exclude yourself from or opt out of the Settlement is August 11, The deadline to file an objection with the Court also is August 11, How do I decide which option to choose? If you do not like the Settlement and you believe that you can hire a lawyer to pursue your claims separately, and you are comfortable with the risk that you might lose your case or get less than you would in this Settlement, then you may want to consider opting out. If you believe the Settlement is unreasonable, unfair, or inadequate, you can object to the Settlement terms. The Court will decide if our objection is valid. If the Court agrees, then the Settlement will not be approved and no payments will be made to you or any other Class Member. If your objection is overruled, then you will still get a payment. 8. What has to happen for the Settlement to be approved? The judge has to decide that the Settlement is fair, reasonable and adequate before she will approve it. The Court already has decided that the Settlement is within the range of potential final approval, which is why you may have received a postcard Notice. The Judge will make a final decision regarding the Settlement at a Fairness Hearing, which is currently scheduled for September 30, How much is the Settlement? THE SETTLEMENT PAYMENT The Defendants have agreed to create the Settlement Fund by paying $2,500, Attorneys fees, litigation costs, an incentive payment to the named plaintiff, and $27, for costs of administering the Settlement will be paid out of this amount. The balance of the Settlement Fund will be divided among all Class Members on a pro rata basis. 10. How much will my payment be? Your payment will be determined based on the amount you were overcharged. Awards shall be determined according to the following formula: - 3 -

4 (a) Step One Determination of the Net Settlement Fund. The Net Settlement Fund shall be calculated by taking the Settlement Fund ($2,500,000.00) and subtracting Administration Costs, Representative Plaintiff s Award, and the Attorneys Fee Award. (b) Step Two Determination of the total amount of overcharge for all of the Settlement Class Members ( Total Overcharges ). This will be done by adding up each Settlement Class Member s overcharges, to get a cumulative amount for the Settlement Class. The overcharge is the amount each Settlement Class Member paid to Key Health in excess of what said Settlement Class Member would have otherwise been charged by the medical service provider at the time the diagnostic service was performed. (c) (d) Step Three Determination of the percentage of the overcharge that will be paid to the Settlement Class Members ( Settlement Overcharge Percentage ). This will be done by taking the Net Settlement Fund and dividing it by the Total Overcharges, which will equal a percentage. Step Four Calculation of the individual award. This will be determined by multiplying the amount of overcharge for each Class Member by the Settlement Overcharge Percentage. 11. Do I have to do anything if I want to participate in the Settlement? No. As long as you do not opt out, a check will be mailed to you at the address on the Notice postcard you received, if you received one. If your address has changed, you should provide your current address to the Claims Administrator at the address set forth in Question 13, below. 12. When will I receive my payment? The Court will hold a Fairness Hearing to consider whether the Settlement should be approved on September 30, If the Court approves the Settlement, then checks should be mailed within 30 days. However, if someone objects to the Settlement, and the objection is sustained, then the Settlement might have to be modified and the entire approval process may have to be repeated. Even if all objections are overruled, an objector could appeal and it might take months or even years to have the appeal resolved. EXCLUDING YOURSELF FROM THE SETTLEMENT 13. How do I exclude myself from the Settlement? If you do not want to receive a payment, or if you want to keep any right you may have to sue Key Health for the claims alleged in this lawsuit, then you must exclude yourself or opt out. To opt out, you must send a letter that you want to be excluded. Your letter can simply say I hereby elect to be excluded from the Settlement in the Washington v. Key Health class action. Be sure to include your name, address, telephone number, and address. Your exclusion or opt out request must be postmarked by August 11, 2014 and sent to: 14. What happens if I opt out of the Settlement? Washington v. Key Health Claims Administrator P.O. Box Providence, RI If you opt out of the Settlement, you will preserve and not give up any of your rights to sue Key Health for the claims alleged in this case. However, you will not be entitled to receive any payment. 15. If I exclude myself, can I obtain a payment? No. If you exclude yourself, you will not be entitled to a payment

5 OBJECTING TO THE SETTLEMENT 16. How do I notify the Court that I do not like the Settlement? You can object to the Settlement or any part of it that you do not like IF you do not exclude yourself or opt out from the Settlement. (People who exclude themselves from the Settlement have no right to object to how other Class Members are treated.) To object, you must file a written document with the Court at the address below. You must also send one copy of your objection to Class Counsel and one copy to Key Health s counsel at the addresses provided in the form below. Your objection should say that you are a Class Member, that you object to the Settlement and the reasons why you object. In your objection, you must include your name, address, telephone number, address (if applicable) and your signature. The following is the form you must use to file your objection with the Court: Your Name: Your Address (not a post office box): City State Zip Your Telephone Number: Your address: SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES CENTRAL DISTRICT KAREN WASHINGTON, individually, and on behalf of all others similarly situated, vs. Plaintiffs, KEY HEALTH MEDICAL SOLUTIONS, INC., a California corporation; and DOES 1-100, Inclusive, Defendants. CIVIL ACTION NO. BC Objection to Class Settlement by [Your Name] [Reason For Your Objection] Date: [Signature] All objections must be post-marked no later than August 11, 2014 and must be mailed as follows: COURT CLASS COUNSEL DEFENSE COUNSEL Los Angeles County Superior Court 600 S. Commonwealth Ave Courtroom 310 Los Angeles, CA Joshua Haffner Kabateck Brown Kellner, LLP 644 South Figueroa Street Los Angeles, California Alberto R. Nestico, Ohio SBN W. Market Street Akron, OH Stuart M. Richter Katten Muchin Rosenman LLP 2029 Century Park East Suite 2600 Los Angeles, CA

6 17. What is the difference between objecting and requesting exclusion from the Settlement? Objecting is telling the Court that you do not believe the Settlement is fair, reasonable and adequate for the class, and asking the Court to stop it. You can object only if you do not opt out of the Settlement. If you are in the Settlement and do not opt out, then you are entitled to a payment, but you will release claims you might have against Key Health. Excluding yourself or opting out is telling the Court that you do not want to be part of the Settlement, and do not want to receive a payment or release claims you might have against Key Health for the claims alleged in this lawsuit. 18. What happens if I object to the Settlement? If the Court sustains your objection, then the Settlement will not proceed unless it is changed to resolve the objection. If the Court overrules your objection, you will be part of the Settlement. THE COURT S FAIRNESS HEARING 19. When and where will the Court decide whether to approve the Settlement? The Court will hold a Final Approval or Fairness Hearing at 2 p.m. on September 30, 2014 in Courtroom 310 of the Superior Court of California, which is located at 600 S. Commonwealth Ave, Los Angeles, California At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. If there are objections, the Court will consider them. The Court may also decide how much to award Plaintiff s Counsel for attorneys fees and expenses and how much the named plaintiff should get as an incentive payment for acting as the class representative. 20. Do I have to come to the hearing? No. Class Counsel will answer any questions the Court may have. You may attend if you desire to do so. If you have submitted an objection, then you may want to attend. 21. May I speak at the hearing? If you have objected, you may ask the Court for permission to speak at the Final Approval or Fairness Hearing. To do so, you must include with your objection, described in Question 16, above, the statement, I hereby give notice that I intend to appear at the Final Approval Hearing. If you intend to have any witnesses testify or to introduce any evidence at the Final Approval or Fairness Hearing, you must list the witnesses and evidence in your objection. 22. What happens if I do nothing at all? IF YOU DO NOTHING If you do nothing at all, then you will receive a payment that represents your pro-rata share of the Settlement Fund net of attorneys fees, expenses, and the named plaintiff s incentive payment. You will be considered a part of the class, you will give up claims against Key Health for the conduct alleged in this lawsuit. By participating in this Settlement, you will not give up any other claims you might have against Key Health that are not part of this lawsuit

7 23. Do I have a lawyer in this case? THE LAWYERS REPRESENTING YOU The Court ordered that the following counsel and their law firms, referred to in this Notice as Class Counsel will represent you and the other Class Members: Joshua Haffner Kabateck Brown Kellner, LLP 644 South Figueroa Street Los Angeles, CA Alberto R. Nestico, Ohio SBN W. Market Street Akron, OH Do I have to pay the lawyer for accomplishing this result? No. Class Counsel will be paid directly from the $2,500, Settlement. 25. Who determines what the attorneys fees will be? The Court will be asked to approve the amount of attorneys fees at the Fairness Hearing. Class Counsel has filed an application for fees seeking $1,000, and costs. You may review the fee application at the Office of the Clerk of the Superior Court of California, 600 S. Commonwealth Ave., Los Angeles, California GETTING MORE INFORMATION This Notice only summarizes the proposed Settlement. More details are contained in the Settlement Agreement. Class Counsel represents the Class Members in this proceeding. They are your Court-appointed attorneys. For additional information about the Settlement and/or to obtain copies of the Settlement Agreement you can contact Class Counsel as follows: CLASS COUNSEL Joshua Haffner Kabateck Brown Kellner, LLP 644 South Figueroa Street Los Angeles, CA Alberto R. Nestico, Ohio SBN W. Market Street Akron, OH DEFENSE COUNSEL Stuart M. Richter Katten Muchin Rosenman LLP 2029 Century Park East Suite 2600 Los Angeles, CA To change your address for purposes of receiving a payment, you should contact the Claims Administrator as follows: PLEASE DO NOT CONTACT THE COURT OR ANY REPRESENTATIVE OF KEY HEALTH CONCERNING THIS NOTICE OR THE SETTLEMENT

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