Insurance companies sued in class action cases

Bethalto chiropractor Thomas L. Kaltenbronn, D.C. filed two class action lawsuits claiming that Liberty Mutual Insurance Co., Liberty Mutural Fire Insurance Co. and Old Republic Union Insurance Co. deceptively reduced payments to him and other licensed healthcare providers.

The suits, filed Dec. 28 in Madison County Circuit Couurt, allege that the insurance companies lowered their payments by claiming preferred provider organization (PPO) agreements, but without actually performing any of the associated obligations to those agreements.

The identical suits name Old Republic as the defendant in one, and Liberty Mutual Fire Insurance and Liberty Mutual Insurance as defendants in the other.

Kaltenbronn is represented by The Lakin Law Firm of Wood River, Freed & Weiss of Chicago, Campbell & McGrady Law Office of Godfrey, Lovell Mitchell & Barth of Seattle and William J. Harte of Chicago.

“With respect to the charges at issue in this lawsuit, Old Republic did not dispute the reasonableness or necessity of the medical expenses at issue, or that the treatment was for injuries relating to a covered loss, but instead systematically imposed improper PPO reductions on its payouts for medical treatment,” the complaint states.

A PPO is a network of healthcare providers who agree to offer preferred pricing in return for receiving patient referrals. Preferred providers are also board certified and credentialed in the community where they live and work.

Kaltenbronn alleges Old Republic (and Liberty) have improperly withheld payments from him and the class for valid insurance claims, and that they are not entitled to retain the money, nor is it otherwise entitled to any PPO discounts from him or the class.

According to the complaint, this "improper" practice is known in the insurance industry as a “silent PPO.”

Old Republic (and Liberty's) acts and omissions are in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1) and similar laws of other states, as well as civil conspiracy and unjust enrichment, Kaltenbronn alleges.

He also claims that he entered into a provider agreement with First Health Network for the purpose of increasing the volume of insured people and other beneficiaries seeking services from him through referrals, channeling and steerage.

First Health, in turn, entered into agreements with payors, including Old Republic, pursuant to which the payors would have access to the First Health Network and its discounts.

“Under these provider agreements, the provider networks and their affiliated payors have an obligation to provide meaningful referrals, channeling and steerage to network providers to justify the discounted rates the providers have agreed to accept,” the complaint states.

Kaltenbronn claims that the increased volume of patients resulting from referrals is an essential benefit of a PPO from his standpoint. He claims that Old Republic (and Liberty) failed to fulfill their obligations and did not take the requisite steps to provide referrals, channeling and steerage. Instead, the insurance companies paid him and other class members at discounted rates.

“The result was that Old Republic exploited the First Health Network as a silent PPO for the purposes of Dr. Kaltenbronn and other class members,” the complaint states.

Kaltenbronn claims Old Republic's (and Liberty's) misconduct increased their profits, while he and other class members were injured by being paid discounted fees for their services without obtaining the expected benefits of an increased flow of patients.

In his suits against Old Republic and Liberty, Kaltenbronn is seeking individually and on behalf of the class for the court to award him and the class members their individual damages and attorneys’ fees and allowable costs, but in no event shall it exceed $75,000 exclusive of interest.

The case against Old Republic has been assigned to Circuit Judge Philip Kardis in Granite City, while the case against Liberty has been assigned to Circuit Judge Nicholas Byron.

04 L 1415
04 L 1416