Chiropractor files another PPO class action in St. Clair County Published: 2009-09-27 23:42:24Author: Kelly Holleran | The Madison St. Clair Record | September 8, 2009A 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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