Class action filed against Country Mutual Insurance

Kathleen Roche, a Belleville chiropractor, has filed a class action lawsuit against Country Mutual Insurance Co. claiming it used a "silent PPO" scheme to deny Illinois healthcare providers millions of dollars in payouts.

According to the lawsuit filed April 17 in St. Clair County Circuit Court, the insurance company improperly accessed Corvel's (PPO) provider discount database and processed claims through automated "re-pricing" and applied discounts to bills submitted by medical providers.

A silent PPO is the "illegitimate" appropriation of discounted reimbursement amounts by insurers who don't offer a preferred provider policy to the insured or any financial incentives for receipt of medical services, the suit claims. Medical providers also receive "nothing" for discounted reimbursement rates.

Roche claims she and the class have been economically damaged and have suffered monetary losses as a result of Country's conduct. The proposed class is represented by Kevin T. Hoerner of Becker, Paulson, Hoerner & Thompson of Belleville. Co-counsel includes Freed & Weiss of Chicago and Richard J. Burke of St. Louis.

Roche claims that she agreed in 2003 to become a member in Corvel's CORCARE PPO, and in turn Corvel agreed to promote providers as "preferred providers" whenever possible.

"The Preferred Provider Agreement did not authorize Corvel to contract on behalf of providers for discounted reimbursement amounts with third parties who did not establish preferred provider or exclusive provider health care coverage plans…," the complaint states.

The class claims Country Mutual wrongfully and deceptively reduced payments by claiming the benefits from PPO agreements when in fact Country did not provide preferred provider healthcare plans to their insured persons or beneficiaries and did not perform any of the associated obligations.

"…The PPO discounts were routinely and systematically applied despite the fact that a preferred provider policy was not offered by Country and/or despite the fact that insured and beneficiaries were not offered incentives to obtain treatment from network providers," the complaint states.

The suit claims that Country Mutual paid a "substantial percentage" of the discount savings and/or a per-transaction fee for processing claims to Corvel.

It also claims that Country Mutual's acts and omissions constitute common law fraud, statutory fraud, unjust enrichment and civil conspiracy.

The Class Action Fairness Act does not apply, according to the suit, because the defendant is an Illinois company and the proposed class consists only of Illinois medical providers. The suit states the plaintiff does not seek damages in excess of $75,000.

Class action relief is the appropriate remedy, the suit claims, because the size of each class member's "relatively small claim" is too insignificant to make individual litigation an economically viable alternative.

"Few class members have any interest in individually controlling the prosecution of separate actions (any that do may opt out)," the suit claims.

"Class treatment is required for optimal deterrence and compensation and for limiting the court-awarded reasonable legal expenses incurred by class members.

"Despite the relatively small size of individual class members' claims, their aggregate volume, coupled with the economies of scale inherent in litigating similar claims on a common basis, will enable this class action to be litigated on cost-effective basis, especially when compared with repetitive individual litigations."