Madison County Circuit Judge Don Weber denied Auto Owners Casualty and Surety Company's motion to dismiss a class action case filed by chiropractor Frank Bemis.
Bemis filed suit in February of 2005, two days before the enactment of the Class Action Fairness Act, claiming Auto Owners improperly took a "PPO" discount without providing any channeling, steerage, or referral of patients to him in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.
"The defendant makes a plethora of challenges to the complaint," Weber wrote. "The court will address these challenges one at a time."
Auto Owners first argued that Weber did not have jurisdiction claiming the case should be decided by the Illinois Workmen's Compensation Commission since Bemis treated a patient that was injured on the job.
"The case is between a doctor (a business) who supplied services to an employee and an insurance company (a corporation) who paid part of the doctor's bill," Weber wrote.
"Since neither the plaintiff nor the defendant is an employer or employee, this court does not believe this case should be referred to a Workmen's Compensation Arbitrator for resolution."
Auto Owners, represented by Robert Shultz of Heyl Royster, also argued that the arbitrator is in the best position to argue the rights and liabilities of the parties.
"This court has no reason to believe that arbitrators, who often are untrained in the law, would be in a position to better judge the complex legal theories advanced by both sides of this litigation," Weber wrote.
Shultz also argued that Bemis lacked standing to sue under the Illinois Consumer Fraud and Deceptive Business Practices Act claming only "consumers" have standing to sue.
Citing the case Zinser v. State Farm which allows doctors or medical organizations to sue whenever consumer protections are implicated, Weber ruled Bemis does have a standing to bring his suit.
"This court notes that many doctors have left, and continue to leave Madison County because of medical malpractice insurance rates. The delivery of quality healthcare at affordable costs is implicated in this lawsuit," Weber wrote.
"Consumers of healthcare in general have a legitimate interest in the allegations and defenses of this action."
Shultz also argued that the case should be dismissed because it is governed by an express contract which allows them to take a PPO discount.
"This court is of the opinion that the existence of a valid contract between the parties and of the implied duty to refer patients is a question of fact at this stage of the proceedings sufficient to withstand a motion to dismiss," Weber wrote.
Weber also wrote that Auto Owners argument that the case should be dismissed based on the Avery decision fails at this stage of the proceedings.
Auto Owners claimed Avery does not allow a breach of contract suit to be the basis of an ICFA complaint even if fraud is alleged.
"That may or may not be the case," Weber wrote.
"A final word of caution may save the court and the parties much time and argument in the future," Weber added.
"It appears that claims such as set out in the complaint and in the amended complaint wherein a worker's compensation claim forms the basis of the underlying cause of action are very different from claims involving PPO deductions for policies written for automobile, homeowner or premises liability claims where the worker's compensation laws are not implicated."
"In a case arising under the Workmen's Compensation Act, the requirement for steerage, channeling or referral of cases under a PPO plan would present an issue unique from a claim arising under, for example, an automobile policy."
Weber continuef, "A worker is free under the Act to seek medical treatment from any provider he selects. This freedom of choice of medical providers may not be available to a patient seeking medical treatment under an auto policy medical coverage."
"Further, a provider of worker's compensation medical treatment must be paid without discount by statute, while a provider of treatment under an auto policy may be able to take a PPO discount under appropriate circumstances."
Weber also ruled that it is doubtful that Bemis, a chiropractic doctor is a sufficient class representative for medical doctors or surgeons.
"Medical doctors such as physicians or surgeons generally have different types of practices and different reasons for patients to seek them out-or the need for referrals," Weber wrote.
"This court would feel more comfortable considering a class certification that includes medical doctors if a medical doctor were a class representative."
"Doctors, not plaintiffs' lawyers, should make the decision to sue insurance carriers," Weber added.
"This order disposes of the major objections to plaintiffs' complaint," Weber wrote. "However, plaintiffs currently have a motion to amend their complaint pending. Plaintiffs may choose to simply stand on their amended complaint or they may choose to file a different amended complaint that is consistent with this opinion."
Weber gave Bemis 30 days to stand on the current amended complaint or to file a different amended complaint consistent with his ruling.
Bemis is represented by Jeffrey Millar of The Lakin Law Firm in Wood River.
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