Mudge takes disputed Bemis-Cincinnati class action settlement claim under advisement

By Amelia Flood | Dec 20, 2010



Madison County Circuit Judge William Mudge has taken under advisement a disputed claim allegedly worth more than $500,000 in a 2005 Preferred Provider Organization (PPO) discount class action brought by chiropractor Frank Bemis.

Mudge heard arguments on the matter Friday.

The dispute arises out of a settlement approved last September between Bemis and a class of approximately 32,000 health care providers and the Cincinnati Insurance Company and Cincinnati Casualty Company.

Bemis led the class, claiming the insurers wrongfully took PPO discounts from workers' compensations bills.

The settlement was reached and approved last year.

The defendants agreed to pay out 90 percent of the discounted bills up to $3.5 million.

The class attorneys, including Bradley Lakin, Robert Schmieder III and others, took home more than $700,000 in fees.

Bemis, as lead plaintiff, took home an award of $5,000.

Cincinnati paid out about $57,000 of a $485,000 claim that Illinois Bone and Joint Institute (IBJI) submitted, denying the bulk due to what it claimed was insufficient documentation required under the settlement.

Cincinnati further contends that IBJI did not cure the claim's defect in the 10 days given under the settlement and that it is not under any obligation to pay out the undocumented claims or to have granted an extension.

The amount later rose after a vendor compiled added claims that IBJI argues were wrongfully discounted, bringing the amount to more than $500,000.

Of that, according to Friday's arguments, IBJI had further
documentation detailing about $260,000 of the more than $500,000 total claim.

The claim was denied in March.

Schmieder III argued over documentation examples found in the claims form.

"I think Cincinnati is reading a little too much into the examples," Schmieder III said Friday.

Cincinnati's attorney Omar Odland told Mudge that the settlement agreement specifically said supporting claims documents had to come from Cincinnati.

He pointed out that the spreadsheets IBJI sent in did not come from his clients.

"These spreadsheets are not prepared by Cincinnati," Odland said.

Because of that, his clients couldn't verify them, how they were generated and whether the PPO discounts claimed were real.

"This is a substantial claim in a class action," Odland added. "Fifty-seven thousand dollars is not junk change."

Odland also argued that his client had followed the right procedures set out by the settlement for paying the claims and was not obliged to grant any extension to IBJI when it sent out the cure letter for the claim's defects last year.

Mudge told the parties he would take the issue under advisement and anything else they wanted to submit was welcome.

"I think I ought to take a little closer look at the settlement," Mudge said.

The settlement was approved last year by Madison County Circuit Judge Barbara Crowder.

The case was then transferred to former Madison County Circuit Judge
Daniel Stack's docket when Crowder took over his role overseeing the asbestos docket in August.

The case then was supposed to go to Mudge but was still shown as under Crowder's watch as of Thursday, according to the court's schedule.

Bemis has been lead plaintiff in several PPO class actions filed by the former partnership of the Lakin Law Firm and the Chicago firm of Freed and Weiss.

That partnership dissolved in 2007.

Freed & Weiss withdrew from the Cincinnati suit in 2008.

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

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