Class Accuses Blue Cross of Extortion

CHICAGO (CN) - Three state chiropractic associations say Blue Cross Blue Shield is trying "to extort millions of dollars" from chiropractors, unfairly demanding that they return money paid on claims, after "retrospective" determinations that the doctors did not provide "covered services." The class action RICO complaint claims Blue Cross unjustly accused chiropractors of fraud, demanded repayment of benefits, and illegally withholds payments for new, unrelated claims, in a "nationwide scheme ... to extort".

In the 155-page federal complaint, the Pennsylvania Chiropractic Association, New York Chiropractic Council and the Association of New Jersey Chiropractors, 14 chiropractors and one occupational therapist, claim that Blue Cross Blue Shield and 22 of its nationwide "entities" subjected them to unfair "post-payment audits and improper recoupment."

They say that Blue Cross ignored their demands for explanations how to appeal, in violation of the Employee Retirement Income Security Act. And it claims Blue Cross denied them plan materials and descriptions upon which the new assessments are made, and has wrongfully taken benefit payments due on new claims.

The chiropractors also say that when an employer is a plan sponsor in a self-funded plan, Blue Cross unlawfully leads the employer to believe that claims have been paid to the provider, though Blue Cross actually holds onto the money to cover the alleged debt.

Dr. Gregory Kuhlman, a chiropractor in Crystal Lake, Ill., says that after eight years providing services for Blue Cross, he received 100 "vague" letters stating that he had been overpaid and demanding immediate repayment. Kuhlman said Blue Cross ignored his efforts to obtain adequate information to appeal the decision. He says Blue Cross then withheld thousands of dollars in benefit payments on new claims, without any further explanation or justification.

A Rhode Island chiropractor claims that the day after he criticized Blue Cross in the media, the company filed a frivolous lawsuit against him, demanding $400,000 for "defamation ... as part of its scheme to intimidate and extort improper payments, and to discourage other providers from challenging defendants' practices."

The class claims that Blue Cross entities have worked together through their "Anti-Fraud Departments" to "design and implement a fraudulent scheme to extort millions of dollars from plaintiffs ... through their improper recoupment demands and forced recoupment payments."

The class wants Blue Cross enjoined from further violations, treble damages, repayment of benefits that have been recouped, and payment of all unpaid benefits, plus interest.

Lead counsel is Patrick Dahlstrom with Pomerantz, Haudek, Grossman & Gross.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit