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Appellate Court of Illinois, Fifth District
February 9, 2016, Decision Filed
JUSTICE WELCH delivered the judgment of the court.
Presiding Justice Schwarm and Justice Moore concurred in the judgment.
[*P1] Held: The circuit court had jurisdiction to approve the nationwide class settlement. The court did not abuse its discretion in certifying the settlement class, which included health care providers located in the State of Washington, and finding that the proposed settlement was fair, reasonable, and adequate.
[*P2] The plaintiff, Lebanon Chiropractic Clinic (Lebanon), filed a class action complaint against the defendants, Liberty Mutual Insurance Company (Liberty), and its subsidiary, Safeco Insurance Company (Safeco), challenging the method as to how the defendants have determined the amounts payable for treatments covered by Medical Payment (MedPay) and Personal Injury Protection (PIP) coverage under personal automobile insurance policies. Thereafter, the parties entered into a nationwide class settlement. Dr. David Kerbs, [**2] a health care provider in the State of Washington, filed an objection to the class settlement, asking the trial court to deny approval of the settlement or, in the alternative, to exclude all Washington providers, on the basis that the Lebanon settlement conflicted with a prior class settlement in Kerbs v. Safeco, a Washington class action case in which Kerbs was the class representative. After conducting an approval hearing on the class settlement, the trial court entered a final order approving the settlement. For the reasons which follow, we affirm the decision of the circuit court.
[*P3] Liberty issues automobile policies with MedPay or PIP coverage, forms of no-fault automobile-insurance coverage, which promises to pay "reasonable expenses" to treat an insured's injuries caused by an accident. "Reasonable expenses" are defined as follows: the actual charge of the treatment; the charge negotiated with the provider; or the charge determined by the insurance company based on a methodology using a computerized database designed to reflect amounts charged by providers of medical services within the same or similar geographic region.
[*P4] This appeal concerns the insurers' use of computerized [**3] databases to reduce medical bills submitted by health care providers. The computer databases operated as follows. Providers were required to submit claims using standardized forms and standardized coding. A third-party bill reviewer would then compare the submitted medical bills against the computerized database to determine the usual, customary, and reasonable (UCR) charge for the medical treatment. The database generated a predetermined percentile benchmark for specific treatments in defined geographical areas and capped a charge to an amount equivalent to the selected percentile. As an example, the 80th percentile benchmark means that the computerized database has determined that 80% of the charges for a given treatment in the relevant geographic area are likely to fall at or below that amount. After conducting this computerized review of the medical bill, the defendants would then send an explanation of review that sets forth the charge, the reduction, and the basis for the reduced payment to the providers.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
2016 IL App (5th) 150111-U *; 2016 Ill. App. Unpub. LEXIS 215 **
LEBANON CHIROPRACTIC CLINIC, P.C., Individually and on Behalf of All Others Similarly Situated, Plaintiff-Appellee, v. LIBERTY MUTUAL INSURANCE COMPANY, LIBERTY MUTUAL FIRE INSURANCE COMPANY, SAFECO INSURANCE COMPANY OF AMERICA, and SAFECO INSURANCE COMPANY OF ILLINOIS, Defendants-Appellees (DR. DAVID KERBS, Objector-Appellant).
Notice: THIS ORDER WAS FILED UNDER SUPREME COURT RULE 23 AND MAY NOT BE CITED AS PRECEDENT BY ANY PARTY EXCEPT IN THE LIMITED CIRCUMSTANCES ALLOWED UNDER RULE 23(e)(1).
Subsequent History: Related proceeding at Folweiler Chiropractic PS v. Safeco Ins. Co. of Am., 2021 Wash. App. LEXIS 2248 (Wash. Ct. App., Sept. 7, 2021)
Prior History: [**1] Appeal from the Circuit Court of St. Clair County. No. 14-L-521. Honorable Vincent J. Lopinot, Judge, presiding.
Froeber v. Liberty Mut. Ins. Co., 222 Ore. App. 266, 193 P.3d 999, 2008 Ore. App. LEXIS 1202 (Sept. 10, 2008)
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