MOUNT VERNON – Madison County Circuit Judge Barbara Crowder improperly certified a class action against Safeco Insurance, Fifth District appeals judges ruled on March 25.
They reversed her decision appointing chiropractor Frank Bemis to represent all medical providers whose bills Safeco reduced in 14 states over 14 years.
"Evidence would be required, on an individualized basis, in order to determine whether Safeco breached its contract to pay the usual and customary charge for reasonable and necessary services for each class member," Justice Stephen Spomer wrote.
"More importantly, Safeco has the right to rebut that evidence on an individual basis and show that any charges it failed to pay were not usual and customary charges for reasonable and necessary medical services," he wrote.
Justice Bruce Stewart concurred, and Justice James Donovan specially concurred.
Donovan wrote, "I agree that a billed charge, in and of itself, is not sufficient proof that the charges therein are reasonable or usual and customary."
"I do not agree with the majority that testimony on an individual basis is the only way that Bemis can prove the reasonableness of his or the class members' charges."
The former Lakin Law Firm sued Safeco on behalf of Bemis in 2005, just ahead of the effective date of Congressional reform that would have required him to sue in federal court.
Bemis claimed he treated Thatcher Levi for injuries he sustained in accident.
Bemis claimed he received from Levi an assignment of his medical coverage claim with Safeco.
Bemis claimed he billed Safeco for $75 and Safeco sent $65.95.
The $9.05 reduction cost Safeco four years in Madison County circuit court and two on appeal.
Crowder certified Bemis in 2009, to represent all providers with Safeco assignments since 1995 in Illinois, Arkansas, Colorado, Connecticut, Indiana, Iowa, Mississippi, New Hampshire, New Mexico, Ohio, South Dakota, Texas, Wisconsin and West Virginia.
Safeco petitioned Fifth District judges for leave to appeal, and they denied the petition last year.
At the Supreme Court, Safeco secured a supervisory order directing the Fifth District to vacate its prior order and grant the petition.
Success followed for Safeco.
"Bemis argues that the predominant issue in this case is whether the computer database utilized by Safeco is inaccurate and whether the use of the database justifies a limitation of payment under the medical payments provision of the policy," Spomer wrote.
"However, if Bemis is successful in proving this, it does not follow that all the other class members submitted usual and customary charges representing reasonable and necessary medical expenses," he wrote.
"The theory Bemis advances, which is that all the bills submitted by a medical provider are presumed to reflect usual and customary charges for reasonable and necessary medical services under the terms of the insurance contract, is contrary to Illinois law," he wrote.
Donovan wrote that Safeco didn't arrive at reimbursement decisions on an individual basis.
"On remand, Bemis should be allowed to make a showing that he can present expert testimony, based on data relied on by experts in the field, that would establish that Safeco did not pay the reasonable or usual and customary charges for treatments he and the other class members provided to their patients," he wrote.
Tom Keefe of Belleville represented Safeco, along with Randal Mullendore, Robyn Buck and Mairi Lough, all of Husch Blackwell in St. Louis.
Tim Campbell of Godfrey represented Bemis, along with Robert Schmieder, Jonathan Piper and Andrew Kuhlmann, all of LakinChapman in Wood River.