Dispute over medical records yields partial refunds

Deadline arrives on Tuesday for class members to file claims in $2.2M accord.

By: Marc Karlinsky, Chicago Daily Law Bulletin: January 15th, 2015

If your law firm paid for medical records of clients from about a dozen Illinois hospitals between 2001 and 2007, you may be eligible for a partial refund through a proposed class-action settlement.

The total amount of the settlement is roughly $2.2 million if all class members submit valid claims by Tuesday’s deadline.

The case dates back to 2004 when Walter Solon and Cynthia Zaletel filed a class-action complaint in Cook County Circuit Court against Schaumburg-based Midwest Medical Records Association Inc. The company contracts with hospitals and practitioners to handle patients’ medical record requests.

Solon and Zaletel alleged MMRA overcharged for fulfilling certain requests, causing a breach of contract and violating the state’s Code of Civil Procedure and the Consumer Fraud and Deceptive Business Practices Act.

MMRA entered into exclusive contracts with health-care clients, placing its employees inside their offices to receive requests, find the records and make the copies. Rather than charging the healthcare providers for the service, MMRA charged the requesting party a flat handling fee and per page fee.

The Code of Civil Procedure sets specific limits on charges for requested medical records.

The code provided that the first 25 pages to be copied were capped at 75 cents per page, with pages 26 through 50 capped at 50 cents each and at 25 cents for each page past 50 – indexed for inflation and adjusted each year by the Illinois comptroller’s office.

To account for added work to make copies from microfilm or microfiche, those documents were subject to a $1.25-per-page rate, also adjusted for inflation.

Documents in other mediums less-easily photocopied, such as photos or X-rays, were restricted to a “reasonable cost” for duplication.

In 2008, an amendment to the law set per-page rates for digitally stored documents at half of the rate set for paper documents.

The court certified the class for any requesters from Oct. 1, 2001, through Dec. 31, 2007.

Solon and Zaletel alleged that prior to the 2008 amendment, MMRA was charging Illinois residents $1.25 for digitally stored records as if they were subject to the microfilm rates.

MMRA was printing the scanned documents from a laser printer – requiring the same amount of work as a photocopy. The plaintiffs contended the documents should have been subject to the photocopy rates.

On a separate aspect of the complaint, the case made it to the Illinois Supreme Court on a certified question over MMRAs practice to charge the maximum-allowed $20 flat handling rate for all records requests.

The high court unanimously ruled in 2010 that MMRA could not charge above the $20 limit but that any rate at or below the cap was deemed reasonable by state law.

Later that year, Associate Judge Rita M. Novak ruled that the per page rates between 25 and 75 cents in the pre-2008 version of the law applied to reproduction of digital records.

Scott R. Rauscher of Loevy & Loevy is one of the attorneys representing the class. Though the dispute is over an overcharge of a few cents per page, he said, the volume of pages is enormous.

“Law firms and other entities request huge amounts of those records, and they can really add up over the years,” Rauscher said.

In November, after nearly 11 years of litigation, Novak gave preliminary approval to a settlement agreement between the parties.

That agreement calls for class members to get back 70 percent of the amount they were overcharged for digital records between October 2001 and the end of 2007.

Postcards were mailed to all class members based on last known addresses in MMRA’s invoice database.

The settlement notice lists Monday as the deadline to ·file claims. But because that’s Martin Luther King Jr. Day, a court holiday, the deadline is effectively Tuesday, Rauscher said.

Class members who received postcards only need to fill out a two-page claim form to confirm current contact information and addresses, accessible on a website for the settlement, www.SolonMMRASettlement.com.

Also on the site is a separate claim form for anyone who believes they are eligible for the class but did not receive a postcard.

“We tried to make it as simple as possible,” Rauscher said.

Rauscher declined to share the precise number of members in the class, citing patient-confidentiality concerns. But the complaint estimated the number was “in the tens of thousands or greater.”

The complaint also provided a list of some of the providers who may have used MMRA during the class period “on information and belief”

In their current names, that list of providers in Chicago includes Mercy Hospital & Medical Center, Northwestern Memorial Hospital, Rush University Medical Center, Presence Saints Mary and Elizabeth Medical Center, Swedish Covenant Hospital and University of Illinois Medical Center.

Suburban facilities mentioned are Presence Holy Family Medical Center in Des Plaines, Edward Hospital in Naperville, Loyola Gottlieb Memorial Hospital in Melrose Park, Westlake Hospital in Melrose Park, Little Company of Mary Hospital in Evergreen Park, Presence St. Joseph Medical Center in Joliet, Silver Cross Hospital in New Lenox and West Suburban Medical Center in Oak Park.

In addition to the settlement total, the parties agreed to award $1 million in attorney fees and $1,500 each to Solon and Zaletel as the named plaintiffs.

The court will hold a hearing for final approval of the settlement on March 5 at 1:30 p.m. in Novak’s courtroom, Room 2402.

In addition to Rauscher, the class is represented by Arthur Loevy, Michael Kanovitz, Jon Loevy and Roshna B. Keen of Loevy & Loevy and sole practitioner Edward M. Burnes.

MMRA is represented by Alan R. Borlack, a member of Bailey, Borlack, Nadelhoffer LLC. The firm declined to comment.

John Cardone, Mark Protus and Wiiliam Jackson – MMRA’s corporate directors, also named as defendants in the case – were represented by Richard J. Mikuta, partner at Kendle, Mikuta & Fenstermaker. He could not be reached for comment.


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