Attacking Medical Costs

November 2015

Petitioner settled two cases for $24,702.07, representing 20% loss of use of petitioner's right hand and 37.5% loss of use of her right arm. The settlement was consummated even though the provider claimed a balance was owed on billing arising out of the care it rendered to petitioner, mostly physical therapy. While there was no doubt that the balances remained outstanding, there was good reason for non-payment. They represented unreasonable and unnecessary care based on a Utilization Review secured by the Workers' Compensation carrier. Still, the parties wanted to settle the underlying Work Comp case. To achieve that purpose, a settlement was struck with the contract containing language obligating the insurance carrier to indemnify and hold petitioner harmless regarding any collection attempt made by the provider. This obligation included providing a defense.

When the provider did in fact sue the petitioner, BCM was retained to defend, making us, at least in name, "petitioner's counsel."

I filed an Answer and Affirmative Defense in behalf of petitioner, charging that the bills the provider was seeking to collect represented unreasonable and unnecessary care and treatment. Moreover, the charges exceeded amounts allowable under the Workers' Compensation Fee Schedule. The provider countered that any issues of Utilization Review were irrelevant and the Fee Schedule did not apply. It relied on the written contract that the petitioner had signed when she engaged the provider for care, arguing she had not performed under it, plain and simple. While I could not dispute the petitioner had signed the contract, I argued that any "failure" of the petitioner to live up to it resulted from a lack of good faith and fair dealing on the provider's part. (All contracts in Illinois contain the implied covenant of good faith and fair dealing). The provider knew at the time the service contract was executed that the care contemplated was connected to a workers' compensation claim and, therefore, all the requirements of the Act applied. Discovery turned up evidence demonstrating that the provider had been notified of the UR determination that a large portion of its care was unreasonable and unnecessary and that the charges for this care would not be reimbursed. Nevertheless, the provider continued to recommend and provide care for the petitioner, not discussing the chance that the workers' compensation insurance would not pay. As a result, the petitioner was deprived of the opportunity to make a fully informed decision as to whether to continue treatment. When asked, the petitioner testified she would have declined the therapy, continuing her home exercise regimen, had she known it was not approved by her insurance.

Provider sought reimbursement amounting to $37,178.41, representing bills of $28,194.00 and attorneys' fees of: $6,000.00. Also at stake was statutory interest, though the provider never specified a precise amount.

Given the nature of the case including the amounts involved, it was, per local rules of the Circuit Court in DuPage County, set for mandatory non-binding arbitration on June 24, 2015. Prior to that hearing, the Workers' Compensation carrier had, in behalf of the petitioner, offered $5,300.00 which the provider summarily rejected, dismissing it as not in good faith. I tried the case at the arbitration hearing, cross-examining the provider's manager and presenting the testimony of the petitioner and CorVel representatives. The arbitration panel ruled entirely in our favor: provider recovered nothing.

As was its right, the provider rejected this award and the matter was returned to Circuit Court for jury trial.

With trial looming, the provider reduced its demand to $23,000.00, as well as statutory interest. The judge held a pre-trial settlement conference where the parties appeared, argued the application of Illinois Workers' Compensation law, the impact of contract law, and the jury appeal of the petitioner. At the judge's urging, the matter was, in the end, settled for $14,000.00.

The tactics employed here by the Carrier were aggressive: litigating the issues in Circuit Court ensured both sides, not just plaintiff, had access to discovery, motions, and the threat of sanctions. BCM was glad to partner with Illinois business and insurance to combat excessive billing.