Judge lets Liberty Mutual keep pressing $17M workers comp billing fraud case vs back clinic

By Scott Holland | Dec 8, 2017

A Cook County judge is allowing a group of insurers, led by Liberty Mutual, to move ahead with a fraud action against a medical practice they have accused of false billing in workers comp cases.

Liberty Mutual filed a $17 million fraud lawsuit in August 2016, against Marque Medicos, a practice specializing in neck and back injuries with several locations in Chicago and west suburban Aurora, saying it billed for procedures and therapy it did not perform on worker’s comp patients and billed at inflated rates.

The lawsuit also named as defendants Derrick Wallery, owner of Marque Medicos, as well as all of Marque Medicos’ various other associated corporate entities. Liberty Mutual was joined in the lawsuit by 17 other affiliate insurance companies.

In an order entered Dec. 1 in Cook County Circuit Court, Judge Jerry A. Esrig denied a motion from Marque Medicos to dismiss the complaint.

Marque’s dismissal request centered on the clinic’s assertion the insurers’ claims were barred by a three-year statute of limitations under an Illinois law. Ersig said the limitations under that law do not apply to civil remedies, only criminal prosecutions, and further said Marque was wrong to rely on the Illinois False Claims Act.

The statutory limits applicable to the allegations at hand require legal action to begin within five years, Ersig said, noting Marque argued the claims also predate that window. But Erisg also explained the allegations include 308 allegedly fraudulent billings submitted from 2008 through at least 2016, so the earliest the applicable limitations window would close is 2021.

Ersig further said Marque erred in trying to argue the insurance companies could not bring statutory claims and common law claims, citing a 1991 Illinois Appellate Court opinion in Corgan v. Muehling. Ersig said the plaintiffs misinterpreted that opinion with respect to implied private right of action, clarifying the statute itself creates the cause of action.

The judge further shot down the clinic’s attempt to argue the fraud complaints lacked the necessary specificity. Ersig said plaintiffs are not required to provide evidence at this point in the pleading stage, and further noted the initial “271-page complaint provides a specific timeframe and precisely what conduct was fraudulent (improper use of medical codes) with respect to 308 claims made by specific defendants to specific plaintiffs and causing a specified amount of damages.”

In its complaint, Liberty Mutual said Marque Medicos billed at higher rates for procedures like “attended electrical stimulation when unattended electrical stimulation was actually performed” and billing for “multiple units per visit of direct one-on-one” physical therapy, when they actually allegedly performed “single-unit-per-visit group therapy.” The lawsuit alleged the practice also billed for “hands-on therapy” when it was never actually performed.

In all, Liberty Mutual claimed it paid more than $2.5 million to Marque Medicos to satisfy those bills, and received approximately $5.1 million in additional bills from the practice. As such, the plaintiffs want the court to award three times the $2.5 million already paid, and two times the $5.1 million “wrongfully attempted to be obtained through the use of fraud,” a total exceeding $17.7 million, as well as legal fees.

Marque has until Dec. 22 to respond to the dismissal. Written discovery in the case is to begin in mid-January.

Liberty Mutual is represented in the action by attorneys John F. Boyle and Michael D. Spinazzola, of the Law Offices of Meachum, Starck, Boyle & Trafman, of Chicago.

Representing Marque Medicos is Randall F. Pace, of Chicago.

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Organizations in this Story

Law Offices of Meachum Starck Boyle & Trafman Liberty Mutual Group Marque Medicos Healthcare

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