Liberty Mutual Insurance accused of reducing medical payments; Lead plaintiff says it suffered loss of $312.23 over seven years

Lebanon Chiropractic Clinic has filed a proposed class action suit against Liberty Mutual Insurance claiming it improperly reduces medical payments by using "biased" software programs.

The suit filed June 24 in St. Clair County Circuit Court says the insurer systematically reduces payments by re-pricing submitted bills under property and casualty policies.

"Liberty Mutual unilaterally limited the amount of payment to Plaintiff (as it did to every Class Member) to a cap generated by the computer software, which as designed enabled Liberty Mutual to limit medical payments to a predetermined, maximum percentile," the suit claims.

Plaintiff attorneys Robert Schmieder and Brad Lakin of SL Chapman in St. Louis seek to represent the proposed class.

They say that the amount by which Liberty Mutual reduces individual claims is sufficiently low - usually by less than $1,000 per claim - that there is no incentive for individuals to pursue action, "making a class action the only meaningful means of seeking relief."

Lebanon Chiropractic, operated by Dr. Dale Fischer, claims that between 2003 and 2010, Liberty Mutual has reduced payments by at least $312.23.

The proposed class includes providers in 31 states who had their claims submitted to computer review and received an amount less than the submitted medical expenses and policy limits. The states of Alabama, Alaska, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Missouri, New Hampshire, Rhode Island, South Carolina, Utah. Vermont, Virginia and Wisconsin are excluded because they are governed by statutes that expressly exclude insurance transactions from statutory coverage.

The suit says that the statute of limitations is tolled because Liberty Mutual "concealed its unlawful scheme."

Safeco Insurance, which became part of Liberty Mutual in 2008, also is named as a defendant.

St. Clair County case number 14-L-521.