King of Prussia, Pa.-based Universal Health Services reached a tentative agreement in August to resolve all outstanding claims in lawsuits tied to alleged sexual abuse of patients at its New Kent, Va.-based Cumberland Hospital for Children and Adolescents, according to the system’s third-quarter financial report and Oct. 28 earnings call.
The agreement is subject to final release agreements and certain court approvals. Its terms are confidential.
Steve Filton, CFO of UHS, said during the call that the system increased its reserves for self-insured professional and general liability claims by $26 million in the third quarter, primarily associated with the settlement.
“We believe a substantial portion of the tentative aggregate settlement amount, and related expenses, is covered by our commercial excess insurance and the remainder is covered by our reserves recorded in connection with the Cumberland Litigation,” the system said in an Oct. 27 news release.
The multi-plaintiff lawsuits, filed in the Circuit Court for Richmond, Va., alleged inappropriate sexual contact during medical examinations by Daniel Davidow, MD, an independent contractor and Cumberland’s former medical director. All defendants have denied liability, according to a September 2024 SEC filing from UHS.
Dr. Davidow and Cumberland Hospital were found liable in September 2024 in a consolidated trial of three plaintiffs’ claims. Jurors awarded a combined $60 million in compensatory damages, $180 million in trebled damages under the Virginia Consumer Protection Act and $120 million in punitive damages.
The court later reduced the punitive damages to a combined $1.05 million, or $350,000 per plaintiff, the maximum allowed under Virginia law. UHS and its administrative services subsidiary, UHS of Delaware, were dismissed from that trial.
Approximately 53 additional claimants had similar allegations with claims pending, the release said, up from about 40 when Becker’s reported on the verdict in October 2024.
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