Burke

Lakin

Stack

A fairness hearing is set for Tuesday to determine whether a charitable contribution of more than $1.2 million is a fair end to a 2004 chiropractor class action suit against an insurance company over claims adjustments.

Granite City chiropractor Lawrence Shipley and Glen Carbon chiropractor Richard Coy settled a class action suit against First Health in Madison County in January.

In the settlement, First Health did not admit to any wrongdoing. It was to give $1.25 million to a charity. The company would pay $650,000 in attorneys' fees and costs to Wood River attorney Brad Lakin's firm and a $10,000 incentive award to the class representatives.

On April 8, Swansea chiropractor Kathleen Roche filed an objection to the settlement. Roche is the lead plaintiff in a competing class action in St. Clair County and is represented by Richard Burke of St. Louis.

Roche argues that the Madison County settlement is "profoundly unfair, unreasonable and inadequate," according to her objection. Roche contends that the settlement does not monetarily compensate class members in light of the fact that the value of the claims in question could total in the hundreds of millions of dollars.

She claims that the charitable contribution is inappropriate.

She further argues that under the Madison County settlement, class members do not have a way to gain fair compensation for First Health's "wrongful deeds."

Roche had filed suit against First Health in St. Clair County in 2007. She claims the Madison County settlement was designed to keep her essentially identical case in St. Clair County from going forward.

Lakin moved to disqualify Burke on April 24.

Madison Circuit Judge Daniel Stack denied Lakin's motion but ordered attorney Kevin Hoerner to speak to the objector's claims that the Madison class representatives are inadequate.

The hearing is set for 1:30 p.m.

Additional conditions in the Shipley/Coy settlement require First Health to change language in its contracts with preferred providers and to increase payer awareness.

Shipley and Coy sued First Health over claims adjustments made to workers' compensation and automobile accident bills. The plaintiffs contended that the company's payors inappropriately applied Preferred Provider Organization (PPO) discounts to the bills, harming the plaintiff class economically and causing them to lose money.

The second amended complaint alleged that First Health "illegally reaped huge savings for themselves and their customers, and pocketed substantial revenues in customer fees, while giving no consideration to preferred providers in exchange for PPO discounts."

The complaint further alleged that First Health broke contracts with the providing physicians, engaged in a civil conspiracy and violated the Illinois Consumer Fraud and Deceptive Business Practices Act.

First Health is represented by Thomas Hennessy III.

The Madison County case number is 04-L-1055.

The St. Clair County case number is 07-L-224.