Appeals court: IL lost no money, but woman can still sue optometrist for alleged insurance fraud in state's name

By Dan Churney | Mar 15, 2019

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An Illinois appeals panel says the bankruptcy trustee for the estate of a woman who once worked for a suburban Chicago optometrist can press an insurance fraud lawsuit on behalf of the state of Illinois against that optometry practice, even if the alleged fraud had not cost the state any money.

The March 12 decision was penned by Justice Michael Hyman, with concurrence from Justices Mary Anne Mason and Aurelia Pucinski, of the Illinois First District Appellate Court in Chicago. It reversed a Cook County judge's findings in the case.

The ruling reinstated an action by David P. Leibowitz, trustee of Marie A. Cahill's bankruptcy estate, against optometrist Dr. Jennifer Gula and the clinic where she worked, Family Vision Care in LaGrange. Also named as defendants were NovaMed, a medical management company that had bought Family Vision, and Surgery Partners, which merged with NovaMed.

Cahill worked at Family Vision from 2012 to 2016, handling insurance billing. She left the clinic, then filed bankruptcy. One year later, Leibowitz lodged a complaint in Cook County Circuit Court, on behalf of Illinois, alleging Gula and the medical firms violated the Insurance Fraud Claims Protection Act.

Leibowitz alleged he learned through Cahill that Gula falsely claimed she owned Family Vision so the practice could receive payments from Vision Service Plan, an eye health insurer that only covers claims from optometrists who own their practices. Cahill further alleged Frank Soppa, a vice president with Surgery Partners, also told her to tell the insurance company Gula was the owner.

Cahill noted about 90 percent of Family Vision's revenue came from Vision Service Plan.

Leibowitz sued the defendants, on behalf of Cahill's estate, as a relator under the qui tam doctrine, which allows whistleblowers with unique knowledge of possible wrongdoing against the state to take legal action in the state's interest. The state must authorize such suits. The whistleblower can collect part of any money recovered that had been taken through fraud. 

Cook County Judge John C. Griffin had granted Family Vision's motion to dismiss. He found, for the suit to proceed, Cahill needed to have been injured by defendants' alleged fraud, but had not been so injured.

On appeal, Cahill contended she was harmed because the state's sovereignty was injured and through the qui tam provision of the Insurance Fraud Claims Protection Act, the state assigned its standing in the matter to Cahill's estate. Cahill added the state has an interest in fighting insurance fraud. 

Family Vision countered that neither the state nor Cahill was injured monetarily, so Cahill could not sue for the state. But Hyman concluded the Act does not require monetary loss to the state or whistleblower.

"The statute's purpose directly involves combating insurance fraud, not recouping damages," Hyman said. "Requiring the state to assign damages to a relator would defeat the purpose of the act because it would preclude a whistleblower from bringing a claim on the state's behalf."

In addition, Hyman pointed out that as a matter of course, as a whistleblower, Cahill does not need to have personal injury to pursue the suit.

"The state need not have suffered monetary damages to confer standing on a relator," Hyman said. "Moreover, in the qui tam context, a whistleblower employee like Cahill, who has personal, nonpublic information of possible wrongdoing, is an 'interested person' under the statute and need not have a personal injury to have standing." 

Hyman remanded the case for further proceedings.

Cahill and her estate are represented by the Chicago firm of Hughes Socol Piers Resnick & Dym.

Defendants are represented by the Chicago firm of McDermott Will & Emory.

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Circuit Court of Cook County Hughes Socol Piers Resnick & Dym Illinois First District Appellate Court McDermott, Will & Emory Llp

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