Class action settled vs NorthShore Physicians group over medical debt liens, terms confidential

By Jonathan Bilyk | Nov 18, 2016

A woman injured in a 2012 car crash has dropped her lawsuit against an Evanston-based medical practice, after a judge signed off on a settlement agreement ending the putative class action litigation in which she had accused the doctors at the practice of wrongly slapping liens on patients in an attempt to collect more than they should under agreements with health insurers.

On Nov. 7, Cook County Judge Sophia H. Hall approved the deal between plaintiff Barbara Niehus and Northshore Physician Associates Inc.

NorthShore Physician Associates Inc. formerly did business as NorthShore University Health System Medical Group. State records indicate the president of NPA is Gerald “J.P.” Gallagher. Gallagher serves as chief operating officer at NorthShore University Health System, according to the health system’s website.

Collection agency First Recovery Group LLC, of St. Peters, Mo., was also named as a defendant in the case, and was included in the settlement agreement.

The judge’s order said the terms of the settlement agreement are “confidential.” The order noted Niehus’ claims were dismissed with prejudice, while the potential class action claims were dismissed without prejudice.

Niehus was represented in the action by attorney Daniel A. Edelman and the firm of Edelman Combs Latturner & Goodwin, of Chicago.

Niehus had filed suit in June against her former doctors, who had provided care to her in the years following a 2012 car accident in which she was injured. According to the complaint, Niehus is a participant in the HMO Illinois health insurance plan offered through Blue Cross Blue Shield of Illinois.

The complaint said she had selected the NorthShore Physician group as her primary care provider, under the terms of her HMO plan.

Further, the complaint said she believed NPA and Blue Cross have a contract, common under such HMO plans, under which Blue Cross pays NPA an agreed set monthly fee, rather than fees for services rendered for patients covered by HMO Illinois.

And Niehus’ complaint said the terms of her plan under HMO Illinois also stipulate that, should she require medical care because she became ill or injured because of the actions or negligence of another person, such as in a car crash, Blue Cross is entitled to collect reimbursements from the other person for expenses paid for their insured’s medical care. Further, the plan’s terms did not allow heath care providers, like NPA, to pursue patients covered by HMO Illinois for further payment beyond what Blue Cross paid them.

The lawsuit said Niehus said she believed NPA had been fully paid for the care she received following her car crash, under the terms of her HMO plan.

However, in January 2016, Niehus said she received a letter from First Recovery Group, asserting it was collecting nearly $13,000 the physicians’ practice claimed it was owed for “medical benefits” provided to Niehus. The letter demanded payment and asserted the debt collector would put a lien on Niehus for a share of whatever she might collect in court from the other driver involved in the crash.

Niehus said that lien is “inconsistent with the HMO Illinois medical benefits plan in which (she) was enrolled at the time of the accident,” as Blue Cross, “and not NPA, had the right to recover medical payments from” the other driver.

Her lawsuit said she believes NPA has similarly routinely placed liens on others like her, “because they believe that they will recover more by placing a lien on the patient’s tort recovery than they received as payments” under agreements with HMO plan providers.

The complaint specifically alleged NPA and First Recovery violated the HMO contract, and committed consumer fraud.

NPA and First Recovery Group were represented in the action by the firm of Winston & Strawn, of Chicago, according to Cook County court records.

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Edelman, Combs, Latturner & Goodwin, LLC Winston and Strawn LLP

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