Mudge takes disputed claim in Cincinnati PPO settlement under advisement

Amelia Flood Mar. 24, 2011, 8:16am



Madison County Circuit Judge William Mudge said he wasn't sure if a $500,000 disputed class action settlement claim was a matter of "form over substance" during a hearing on Thursday.

But, he said he was going to give both plaintiff's attorney Robert Schmieder II and Omar Odland, the attorney representing Cincinnati Insurance and Cincinnati Casualty companies, more time to find out.

Mudge kept a plea by class member Illinois Bone and Joint Institute (IBJI) under advisement as the parties said they would take more time to discover whether or not spreadsheets submitted by IBJI were adequate claims documentation that would force Cincinnati to pay out 90 percent of $500,000 under terms of a 2005 class action settlement.

Cincinnati settled with a class of Illinois health care providers including IBJI two years ago.

The class led by chiropractor Frank Bemis alleged that the insurance company took Preferred Provider Organization (PPO) discounts it was not entitled to from workers' compensation treatment claims.

The suit is one of a number filed in the early part of the last decade by Schmieder II's firm, now LakinChapman LLC of Wood River, and the Chicago firm of Freed & Weiss.

The pair filed a number of the PPO class actions in both Madison and St. Clair counties.

The partnership broke up in 2007.

The Bemis-Cincinnati settlement was worth up to $3.5 million.

Bemis got $5,000 as class representative.

Schmieder II and his team took home $700,000 in fees.

Following the 2009 settlement, class members had until Nov. 23, 2010 to submit their claims and supporting documents.

IBJI submitted claims worth $485,000 on Nov. 23, 2009.

However, Cincinnati paid out $52,000 of $57,000 that the company ruled to have been properly supported.

It denied the rest of the IBJI claim.

IBJI then submitted a new claim and documents with what it claims were additional discounted treatment claims on March 24, 2010.

Cincinnati denied that claim as untimely and lacking supporting documents.

The dispute came to Mudge last December.

Schmieder II argued that the documents listed on the claim forms were examples and not the only documents that Cincinnati could consider in determining whether or not the claim should be paid under the settlement.

Schmieder II reiterated those arguments to Mudge Thursday morning.

He argued it was the company's burden to match up information from the IBJI spreadsheets to their internal documents.

"It may be cumbersome and they may not like it but they have the data," Schmieder II said.

Odland countered that the March 24, 2010 spreadsheets should not factor in to Mudge's decision about the claim's payment because they had come in five months past the end of the claims period.

"They just sat on it, Judge," Odland said.

Odland also pointed out what Schmieder II agreed was problems with IBJI's math in the Nov. 23, 2009 and March 24, 2010 spreadsheets.

One patient, for example, appeared more than 50 times, Odland said. However, the claims weren't related to workers' compensation.

Odland told Mudge that it appeared IBJI was trying to claim recompense for claims that weren't covered by the settlement.

Mudge expressed his own doubts about Schmieder II's position, particularly on the time-issue of the March 24, 2010 documents.

"Well, I'm leaning Cincinnati's way on that one," the judge said of the deadline issue.

Mudge did not allow Peter Schmidt of Toledo, Ohio, a representative for IBJI, to testify at Thursday's hearing.

Odland raised the point early in the hearing that he had not had the opportunity to depose Schmidt and could not waive his clients' right to do so.

Following arguments, Mudge took the issue back under advisement.

He gave the parties 60 days to conduct additional discovery and to take depositions including Schmidt's if needed.

The IBJI claim has been under advisement since December 2010.

The case is Madison case number 05-L-178.

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