The complaint that the Center for Athletic Medicine (CAM) filed against Independent Medical Billers of Illinois (IMB) in 2005 concerned an agreement signed 10 years earlier. Under the contract, the billing company was to process all claims and follow up on payment, with the primary focus that of “maximizing CAM reimbursement and minimizing the days outstanding from all payers.”
IMB was to receive 4.5 percent on all reimbursements, and 6.25 percent on all claims not originally processed by IMB. Medorizon Inc. became the parent company of IMB sometime after the contract was signed.
In its lawsuit, the physician group alleged that IMB broke the contract by failing to maximize reimbursements, handle debt in a timely manner, or properly encode charge documents. Between 2000 and 2004, CAM claimed, about 24 percent of its total charges had been identified as lost and nonrecoverable—more than $4.4 million. IMB was thus “unjustly enriched” because it had failed to provide the agreed-upon services, CAM said.
In 2006, IMB filed its own complaint against the physician group, seeking to recover unpaid fees the physicians allegedly owed it for billing services. In response to the physician group’s charges, IMB maintained that the contract was void because it violated the fee-splitting ban.
Because the Appellate Court upheld the dismissal of the physician group’s complaint and agreed that the contract was void, it also ruled that CAM was unable to sue IMB for unjust enrichment. Both parties must be left “where they have placed themselves,” the court said.
The Appellate Court decision in this case is at www.state.il.us/Court/Opinions/AppellateCourt/2008/1stDistrict/May/1071594.pdf.
Anne Paxton is a writer in Seattle