Verci v. High

• Decision Date: 18 December 2019
• Docket Number: Appeal No. 3-19-0106
• Parties: Dawn VERCI, Plaintiff-Appellee, v. Michael HIGH and International Union of Operating Engineers, Local No. 649, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

2019 IL App (3d) 190106 -B
161 N.E.3d 249
443 Ill.Dec. 125

Dawn VERCI, Plaintiff-Appellee,
v.
Michael HIGH and International Union of Operating Engineers, Local No. 649, Defendants-Appellants.

Appeal No. 3-19-0106

Appellate Court of Illinois, Third District.

Opinion filed December 18, 2019
Modified Upon Denial of Rehearing January 23, 2020

Jo T. Wetherill, of Quinn, Johnston, Henderson, Pretorius & Cerulo, of Peoria, for appellants.

Todd A. Strong, of Strong Law Offices, of Peoria, for appellee.

PRESIDING JUSTICE LYTTON delivered the judgment of the court, with opinion.

443 Ill.Dec. 127

¶ 1 In March 2014, plaintiff Dawn Verci filed negligence claims against defendants Michael High and International Union of Operating Engineers, Local No. 649. Plaintiff claims that as a result of defendants' negligence, she was injured and required to undergo medical treatment costing in excess of $1 million. A majority of plaintiff's medical charges are from Dr.

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443 Ill.Dec. 128

Richard Kube of the Prairie Spine and Pain Institute and the Prairie Surgicenter. The reasonable value of the medical services provided by Kube is a major issue of contention.

¶ 2 In January 2019, the trial court entered an order (1) prohibiting defendants from cross-examining Kube or his associated medical entities regarding their own cash advertised pricing at trial and (2) allowing defendants' billing expert, Rebecca Reier, to testify at trial regarding her opinions on the reasonable value of Kube's medical services. Soon thereafter, the parties filed a joint petition for interlocutory appeal. The trial court granted the petition and certified two questions challenging the court's order. We answer both certified questions in the affirmative and remand for further proceedings.

¶ 3 I. BACKGROUND

¶ 4 On March 14, 2012, plaintiff filed her first amended complaint, alleging negligence against each defendant. Plaintiff claims that, as a result of defendants' negligence, she was physically injured, required to undergo medical treatment, and incurred over $1 million in charges for her treatment. Approximately $800,000 of plaintiff's alleged medical expenses arise out of treatment plaintiff received from Dr. Richard Kube at the Prairie Spine and Pain Institute and the Prairie Surgicenter. Both entities are owned and operated by Kube.

¶ 5 In discovery, defendants disclosed the identity of an expert, Rebecca Reier, to present testimony regarding the reasonable value of plaintiff's medical services. Reier prepared a report, which was provided to plaintiff. In her report, Reier reviewed Kube's total charges of $810,937.04 and concluded that "the Usual, Customary and Reasonable total charges for the same geographic area for the same services are approximately $148,118.00." (Emphasis in original.) One of the bases for Reier's conclusion was the cash prices advertised by Prairie Spine and Pain Institute and Prairie Surgicenter on Healthcare.com. Reier determined that the charges submitted to plaintiff by Kube are more than 547% higher than the prices advertised online by both entities for the same procedures. Sources Reier used in determining the usual, reasonable, and customary charges for the medical services plaintiff received include "Fair Health Data Systems," "Optum National Fee Analyzer 2012-2016—Fair Health Database," and "The American Hospital Directory CMA and Fair Health Database." According to Reier's report, "Fair Health collects charge data from private insurer and health plan administrators across the country." Plaintiff filed a motion and later a supplemental motion to bar Reier's testimony.

¶ 6 Reier was deposed in 2018. She explained that in determining the reasonable value of medical services, she relied on three databases: (1) FAIR Health, (2) Optum, which also uses FAIR Health data, and (3) American Hospital Directory. She identified FAIR Health as "[t]he primary database" she used.

¶ 7 Reier explained that FAIR Health receives all of its data from insurance companies. Insurance companies report the charges they receive from medical providers to FAIR Health, and FAIR Health separates the data geographically. FAIR Health then identifies a range of charges, from the 5th to 95th percentile. Outliers are eliminated, so if a provider charges a very different rate than others, that rate is not included in the database because it is "not considered statistically significant by FAIR Health." Reier determined that a reasonable charge would be at the 75th percentile, which means "75 percent of all the providers in this geographic area

161 N.E.3d 253

443 Ill.Dec. 129

charge this amount or less." She chose the 75th percentile because it is her "peer group's choice among, like, your planners as well as practitioners and practice managers. It seems to be the fairest way to identify what everybody in the neighborhood is charging."

¶ 8 In the FAIR Health database, providers are identified by geographical area. FAIR Health does not identify providers by name. Reier did not reach out to providers in the geographic area to determine what they charge. She relied exclusively on the data from FAIR Health. With respect to FAIR Health's methodology, Reier stated, "[W]e have to bring in the Fair Health attorneys, because they will be glad to explain in detail methodology since none of us are statisticians." She later stated, "I have their, their standard protocol which I can provide. And as I have said, if there is a question about their protocol, their data analysis, um, the attorneys are more than willing to come and speak."

¶ 9 Reier also relied on data from Optum. Optum takes the FAIR Health data and separates it into smaller geographical areas. Reier did not look at the actual data that Optum collected. Reier assumes that Optum and FAIR Health correctly performed their statistical analyses. She has not seen the raw data used by Optum or FAIR Health but sees the results of their statistical analyses, which is what she uses in her medical billing analyses.

¶ 10 According to Reier, FAIR Health is the largest collector of data. Reier did not identify how many insurance companies report their charges to FAIR Health, nor did she state what percentage of insurers provide data to FAIR Health. There are other databases like FAIR Health, but Reier does not use them "because they're not big enough[,] and the bigger the better." Reier's opinions are based on the information from FAIR Health that was contained in its own database or passed on to Optum. Reier agreed that she relies on the data accumulated by FAIR Health but does not have direct access to the actual data that FAIR Health uses. She did not make any effort to contact individual medical providers or outpatient centers to determine what they charge.

¶ 11 Reier believes that the cash price a medical provider offers to patients has some bearing on the reasonable value of the service provided. She does not think a provider would offer a cash price that would cause him or her to lose money. She would not expect the cash price for a service to be six-and-a-half times less than a charged price.

¶ 12 Kube also provided deposition testimony. He testified that the cash price of a procedure "represents or illustrates what I think would be a fair reimbursement for my services under that [cash] model and everything that it entails." He believes that he has advertised cash prices for surgical procedures for the past two or three years.

¶ 13 On January 25, 2019, the trial court entered an order stating:

"1. Defendant will not be allowed to cross-examine Dr. Kube or his associated medical entities with regard to their own cash advertised pricing at trial.

2. Rebecca Reier, defendant's billing expert, will be allowed to testify at trial regarding her opinions on the reasonable value of the medical services at issue in the litigation. Plaintiff is allowed to cross-examine Reier with regard to the data she relies on as the basis for her opinions."

The parties filed a joint petition for appeal, pursuant to Illinois Supreme Court Rule 308 (eff. July 1, 2017). The trial court granted the petition and certified the following questions for review:

161 N.E.3d 254

443 Ill.Dec. 130

(1) "Did the Trial Court err in denying the defendants' right to cross-examine Dr. Kube and his associated medical entities with prices advertised by Dr. Kube and the same associated medical entities as prices that represent the reasonable value for the services rendered[?]"

(2) "Did the Trial Court err in allowing defendants' billing expert, Rebecca Reier, to testify over plaintiff's objection when the defendant's expert relies upon geographically zip coded information collected by national databases rather than personally obtained medical billing comparisons[?]"

¶ 14 II. ANALYSIS

¶ 15 The scope of review in an interlocutory appeal brought under Rule 308 is limited to the certified questions. Spears v. Association of Illinois Electric Cooperatives , 2013 IL App (4th) 120289, ¶...