(Reuters) - A Nevada jury awarded $500 million in punitive damages in a closely watched case against two affiliates of UnitedHealth Group stemming from a hepatitis C outbreak in the state, according to a spokeswoman for a law firm in the case.
The case involves two patients who claimed they became infected with hepatitis C, a disease that attacks the liver, because their gastroenterologist used allegedly unsafe injection practices for an endoscopy.
The plaintiffs argued that UnitedHealth should be held responsible because the accused gastroenterologist was part of the company's network and that the insurer should have known about allegedly unsafe practices.
The case could set a far-reaching precedent requiring health insurance companies to police practices of member hospitals and doctors, according to experts.
Last week, the same jury in Clark County District Court in Las Vegas awarded $24 million in compensatory damages in favor of the patients and one of their spouses. In the jury's punitive award on Tuesday, it assessed $270 million to Health Plan of Nevada and $230 million to Sierra Health Services, according to Sharon Christal, a spokeswoman for the law firm representing the plaintiffs.
The plaintiffs had sought over $1 billion in punitive damages.
Health Plan of Nevada said the damages were unreasonable and evidence and testimony kept from the jury would help in an appeal.
"The number announced today has no grounding in reality -- it represents fantasy damages, not punitive damages," the company said in a statement.
The cases are Helen Meyer v. Health Plan of Nevada Inc, Eighth Judicial District Court (Clark County), No. 09A583799; and Bonnie Brunson v. Health Plan of Nevada Inc, Eighth Judicial District Court (Clark County), No. A-10-608344-C.
(Reporting by Andrew Longstreth; additional reporting by Jacob Hale Russell and Caroline Humer; Editing by Stephen Coates)