Chiropractor files another PPO class action in St. Clair County

Published: 2009-09-27 23:42:24
Author: Kelly Holleran | The Madison St. Clair Record | September 8, 2009

A putative class action lawsuit has been filed against an insurance company that allegedly benefited from preferred provider discounts without referring patients to doctors.

Lead class plaintiff Kathleen Roche, D.C., claims defendant Zenith Insurance Company would repeatedly reduce bills based on the application of a First Health preferred provider organization discount, but did not refer its covered claimants to providers.

According to the complaint filed Aug. 27 in St. Clair County Circuit Court, Roche entered into a contract with First Health Group Corp., which is an organization that oversees the preferred provider organization of which Zenith is a member.

Under the terms of the contract, Roche agreed to provide participating insurance companies with either a 20 percent discount below the amount allowed by the Illinois worker compensation fee schedule or a 15 percent discount on all other bills, the suit states.

In return, the insurance companies were to direct their covered beneficiaries to doctors providing the discounted services, thus increasing the doctors' patient flow, the complaint says.

"The provider is the intended beneficiary of the Payor Agreement (through steerage of patients by the Payor to the provider) and the Payor is the intended beneficiary of the Provider Agreement (through reduced charges for patients sent to the provider by the Payor)," the suit states.

However, Roche and the putative class claim Zenith is operating a silent PPO, which means the insurance company reaps the benefits of discounts without steering patients to participating doctors.

"Defendant has in fact admitted that it does not direct or refer it covered beneficiaries to network providers 99% of the time," the suit states. "Rather, the Payors, like Zenith merely reduce reimbursement to every network provider merely because the provider is in the network and not because the Payor utilized the Provider," the suit states.

Under the silent PPO scheme, Roche and the class receive nothing in return for the discounts they offer Zenith, according to the complaint.

Zenith regularly submitted explanation of payment forms to doctors in First Health's PPO network, which would explain why they were entitled to discounts. In the forms, Zenith would claim it was entitled to discounts either because it was a member of the First Health network or because it was a contracted payor, the complaint says.

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