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Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 1 of 11 PageID #:1981
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`
`
`
`Case No.: 1:22-cv-00700
`
`
`
`The Honorable Robert M. Dow, Jr.
`
`
`
`
`Scott M. Archer,
`
`
`
`
`
`vs.
`
`Rehabilitation Institute of Chicago dba as Shirley
`Ryan Ability Lab, an Illinois non-profit
`corporation,
`
`
`Plaintiff,
`
`Defendants.
`
`
`
`PLAINTIFF’S SECOND AMENDED COMPLAINT
`
`Plaintiff Scott Archer (“Scott”) for his Complaint against the Rehabilitation Institute of
`
`Chicago DBA Shirley Ryan Ability Lab (“SRAlab”) alleges as follows:
`
`PARTIES
`
`1.
`
`Scott is a resident of Maricopa County, Arizona. Scott is married to Carol Archer
`
`(“Carol”).
`
`2.
`
`Defendant Rehabilitation Institute of Chicago dba as Shirley Ryan Ability Lab is an
`
`Illinois non-profit corporation with its principal place of business in Chicago, Illinois.
`
`JURISDICTION AND VENUE
`
`3.
`
`This Court has jurisdiction over SRAlab and the subject matter of this claim under
`
`28 U.S.C. § 1332.
`
`4.
`
`This Court is the proper venue for the matter based on an order from Arizona
`
`District Court, dated February 7, 2022.
`
`
`
`
`
`
`
`
`
`
`
`

`

`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 2 of 11 PageID #:1982
`
`FACTUAL BASIS
`
`Archer’s Health Insurance Coverage
`
`5.
`
`At all relevant times, Scott and his family were covered by an employer-provided
`
`health insurance plan underwritten by All Savers Insurance Company, a wholly-owned subsidiary
`
`of United HealthCare Services, Inc. In the Arizona District Court action, the Complaint named several
`
`United Health entities, including All-Savers Insurance Company, United HealthCare Services, Inc.,
`
`UnitedHealthGroup, Inc. and UnitedHealthcare. For purposes of this Complaint, these entities will be
`
`collectively identified as UHC.
`
`6.
`
`Barclay provided insurance under a “self-insured” plan that covered the first
`
`$15,000 in medical bills for any individual during a plan year. Barclay also purchased a stop-loss
`
`insurance policy from All Savers that covered everything after the first $15,000.
`
`7.
`
`Scott is a principal at Barclay Group Development Services, LLC (“Barclay”) and
`
`he continues to work for Barclay.
`
`8.
`
`Scott had a history of lumbar back problems including multiple surgeries and
`
`ongoing difficulties with pain. As part of his treatment for ongoing lumbar pain, he underwent a
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`protein-rich plasma/Fibrin injection in Texas on December 5, 2017.
`
`9.
`
`10.
`
`After the injection Scott experienced uncontrolled pain at the injection site.
`
`On December 14, 2017, Scott arrived at the Banner University Medical Center
`
`(“Banner”) ER in Phoenix, Arizona, complaining of progressive upper and lower extremity
`
`weakness and decreased motor function. Scott’s knees were buckling, and he was having
`
`uncontrolled pain.
`
`11.
`
`Testing and examination revealed that Scott had diffuse cervical and thoracic
`
`edema with osteomyelitis.
`
`
`
`
`
`
`
`-2-
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`

`

`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 3 of 11 PageID #:1983
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`12.
`
`On December 15, 2017, Scott underwent an emergent C4-T1 laminectomy and C4-
`
`T2 fusion.
`
`13.
`
`Scott’s recovery course was complicated. Scott had acute neurological symptoms,
`
`weakness, and was unable to walk. He required significant assistance in performing his activities of
`
`daily living.
`
`14.
`
`Given his condition, Banner discharged Scott to its acute inpatient rehabilitation
`
`(“AIR”) facility. By definition, an AIR facility requires the patient to participate in intensive
`
`rehabilitation, typically three hours of therapies daily, or be expected to progress to participating in
`
`three hours per day. An AIR provides continuous medical supervision and coordinated care
`
`between doctors, occupational therapists and physical therapists.
`
`15.
`
`Scott’s medical team at Banner certified that he had a medical condition that
`
`qualified for AIR, and Scott was transferred to Banner’s AIR on December 23, 2017.
`
`16. While in AIR, Scott’s upper extremity strength improved, but his lower extremity
`
`strength did not. Scott was making slow progress.
`
`17.
`
`UHC was actively conducting utilization review and approving his continued stay a
`
`few days at a time.
`
`18.
`
`Scott’s lack of progress led UHC to challenge whether he met the criteria for acute
`
`rehabilitation.
`
`19.
`
`UHC advised Carol that Scott could be discharged home and cared for in an
`
`outpatient setting.
`
`20.
`
`Since UHC continued to deny acute rehabilitation and the prospect of taking care of
`
`Scott at home petrified Carol, she began researching alternative options for acute rehabilitation.
`
`
`
`
`
`
`
`-3-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 4 of 11 PageID #:1984
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`21.
`
`Carol contacted SRAlab. SRAlab obtained Scott’s records and determined that
`
`Scott was medically capable of participating in acute inpatient rehabilitation and agreed to admit
`
`him. SRAlab sought authorization for inpatient rehabilitation on January 11, 2018, and UHC
`
`denied that request.
`
`22.
`
`UHC confirmed its decision in a letter dated January 12, 2018. UHC determined
`
`that Scott’s ability to perform self-care had plateaued and that outpatient rehabilitation was the
`
`proper setting for his care.
`
`23.
`
`Unfortunately, Scott’s condition worsened while at Banner’s AIR. He ended up
`
`back at Banner on January 20, 2018, to treat blood clots, pulmonary emboli and a pressure sore.
`
`24.
`
`Scott recovered and was ready for discharge from Banner on January 27, 2018.
`
`Scott’s physicians advised UHC that inpatient rehabilitation was necessary for Scott and he was
`
`fully capable of participating in the required level of therapies.
`
`25.
`
`26.
`
`Carol and Banner lobbied UHC to return Scott to Banner’s AIR.
`
`UHC again refused to transfer Scott back to AIR because he was not an appropriate
`
`candidate for its services.
`
`27.
`
`Carol renewed contact with SRAlab to determine whether it would still accept Scott
`
`as a patient. SRAlab agreed to admit Scott.
`
`28.
`
`Before transferring Scott to SRAlab, Carol confirmed that SRAlab was a UHC-
`
`contracted facility.
`
`29.
`
`SRAlab indicated that it could enter into a self-pay agreement since UHC denied
`
`preauthorization. It required a $130,928 payment for the first 28 days of care at SRAlab.
`
`30.
`
`Carol attempted to negotiate a lower self-pay rate; however, SRAlab advised her
`
`that it was the “standard” rate.
`
`
`
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`-4-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 5 of 11 PageID #:1985
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`31.
`
`Carol was clear throughout the admission process that they intended to self-pay so
`
`Scott could get better, but they fully intended to pursue appeals and payment from UHC.
`
`32.
`
`33.
`
`34.
`
`35.
`
`SRAlab agreed to refund any funds due back to Scott if UHC overturned its denial.
`
`Carol executed the Self Pay Agreement and wired $130,928.00 to SRAlab.
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`SRAlab admitted Scott on January 28, 2018.
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`Scott’s recovery followed a complicated course, but he obtained significant
`
`recovery after remaining at SRAlab for 57 days through March 26, 2018.
`
`36.
`
`Scott executed three additional self-pay agreements to cover Scott’s 56 days at
`
`SRAlab that each required additional payments. Scott paid SRAlab $283,276.00.
`
`37. While at SRAlab, Scott appealed UHC’s denial several times.
`
`38.
`
`39.
`
`40.
`
`SRAlab also filed a provider appeal to UHC on April 30, 2018.
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`On May 22, 2018. UHC denied SRAlab’s appeal.
`
`Scott required follow-up MRIs to continue his treatment. SRAlab failed to obtain
`
`proper orders for follow-up MRIs and failed to have the MRIs conducted at a contracted facility so
`
`that UHC would pay the claims.
`
`41.
`
`42.
`
`SRAlab sent Scott a bill for $46,088.95 on August 1, 2018 for these MRIs.
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`After one of Scott’s appeals to UHC, it finally decided that the time from January
`
`28, 2018 to February 12, 2018 was covered. But UHC never processed payment for the claim and
`
`SRAlab never requested payment.
`
`43.
`
`In fact, SRAlab did not file its claim for services provided to Scott with UHC until
`
`December 12, 2018, nearly nine months after Scott’s discharge. SRAlab’s claim was for
`
`$329,364.95.
`
`
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`
`-5-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 6 of 11 PageID #:1986
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`44.
`
`UHC’s explanation of benefits to SRAlab advised that it was entitled to a discount
`
`of $202,653.95 and that the maximum amount due to SRAlab for the full stay would have been
`
`$126,711.00. UHC also indicated that it would make no payment to SRAlab because it filed the
`
`claim past the provider’s timely filing limit, and SRAlab did not seek preauthorization for the
`
`services.
`
`45.
`
`Once Scott received the explanation of benefits, he noted that UHC did not pay
`
`SRAlab for the time it agreed to pay. Scott retained counsel, who sought payment for the entire
`
`claim, but indicated that UHC needed to at least process payment for the two weeks.
`
`46.
`
`UHC reprocessed the claim until November 30, 2019. This explanation of benefits
`
`reflected payment for the approved timeframe but reaffirmed UHC’s denial of Scott’s remaining
`
`days at SRAlab. UHC paid SRAlab $35,568.00. Around January 29, 2020, Scott received a refund
`
`check from SRAlab for $70,002.91.
`
`47.
`
`48.
`
`Scott requested an accounting for the refund, and SRAlab would not provide it.
`
`In the interim, Scott exhausted his administrative remedies with UHC by filing
`
`another appeal in June 2020.
`
`49.
`
`UHC did not respond not Scott’s June 2020 appeal. Scott filed a lawsuit against
`
`UHC and others on December 21, 2020, under ERISA 29 U.S.C. § 1132(a)(1).
`
`50.
`
`On January 6, 2021, UHC issued a final denial. It advised Scott that SRAlab was
`
`not entitled to bill or collect for services under the terms of its network contract with UHC. The
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`letter identified the denial code as “924” defined as” “According to the network healthcare facility
`
`contract, admission notification was required but not received. Therefore, the applicable
`
`administrative reimbursement reduction has been applied and deducted from the facility’s
`
`
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`-6-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 7 of 11 PageID #:1987
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`payment. According to the network contract, the patient may not be billed for the amount of the
`
`administrative reimbursement reduction.”
`
`51.
`
`UHC further advised Scott that SRAlab was not entitled to bill for these charges.
`
`Based on our review of the information we have found the dates of service
`February 13, 2018, to March 26, 20180 (sic) would be provider liability.
`This means that this is the provider’s responsibility, and the provider should
`not be billing you for these charges. Please note if the provider is billing you
`for these charges then we will need billing proof showing this information.
`We would like to advise you that if the provider is not billing you for these
`charges, then the provider will need to submit the appeal for review as this
`is their responsibility per their provider network contract.
`
`Based on UHC’s new basis for denial in January 2021, Scott filed an amended
`
`52.
`
`complaint and added SRAlab as a party.
`
`53.
`
`The case between Scott and SRAlab was transferred to this district by order dated
`
`February 7, 2022 because the District of Arizona did not have jurisdiction over SRAlab.
`
`COUNT I
`
`BREACH OF CONTRACT – SRAlab
`
`Scott incorporates all previous allegations.
`
`On information and belief, SRAlab has a contract with one of the UHC entities as
`
`54.
`
`55.
`
`an in-network provider for UHC’s health insurance products.
`
`56.
`
`Both Scott and SRAlab confirmed with UHC that it was an in-network provider
`
`under Scott’s coverage.
`
`57.
`
`On information and belief, the contract between SRAlab and UHC prohibits
`
`SRAlab from charging UHC insureds for unauthorized and not medically necessary treatment.
`
`58.
`
`UHC’s final appeal determination concluded that SRAlab was not entitled to charge
`
`or collect funds from Scott if services were not medically necessary or preauthorized.
`
`59.
`
`Scott is a third-party beneficiary of the contract between SRAlab and UHC.
`
`
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`-7-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 8 of 11 PageID #:1988
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`60.
`
`By not reimbursing Scott for what he paid for days 15-56 of his stay, SRAlab
`
`breached its contract with UHC.
`
`61.
`
`SRAlab’s breach of its provider agreement with UHC damaged Scott.
`
`COUNT II
`
`NEGLIGENCE - SRAlab
`
`Scott incorporates all previous allegations.
`
`SRAlab had a duty to take every reasonable action to ensure that Scott could secure
`
`62.
`
`63.
`
`payment for his stay from his insurer.
`
`64.
`
`65.
`
`66.
`
`SRAlab had a duty to obtain preauthorization for medical care and treatment.
`
`SRAlab had a duty to submit its billing for Scott to UHC in a timely fashion.
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`SRAlab failed to obtain preauthorization’s for continued care for Scott at its facility
`
`and for any diagnostics or other procedures that could be covered for Scott.
`
`67.
`
`68.
`
`SRAlab failed to obtain preauthorization for various MRIs.
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`SRAlab did not submit its bill to UHC until November 2019, more than 180 days
`
`after Scott’s discharge from SRAlab.
`
`69.
`
`70.
`
`In part, UHC denied SRAlab’s claim because it was filed late.
`
`SRAlab’s failure to obtain preauthorization from UHC and its failure to timely bill
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`for its services to UHC caused Scott damage.
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`COUNT III
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`NEGLIGENT MISREPRESENTATION – SRAlab
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`SRAlab had a duty to represent its charges fairly and honestly.
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`SRAlab entered into self-pay contracts with Scott.
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`SRAlab contracts represented that Scott was receiving a 20% discount.
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`71.
`
`72.
`
`73.
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`-8-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 9 of 11 PageID #:1989
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`74.
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`SRAlab failed to disclose to Scott that its full billed charges were not consistent
`
`with usual, customary, and reasonable charges collected from insurers and patients.
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`75.
`
`SRAlab led Scott to believe that he was paying rates similar to what UHC would
`
`pay if the claim were approved.
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`76.
`
`SRAlab’s charges to Scott under the private pay agreement were nearly double
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`SRAlab’s contracted rate with UHC.
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`77.
`
`SRAlab knew that Scott would rely on it for accurate information about charges
`
`and billing rates.
`
`78.
`
`Scott relied on SRAlab to provide him with accurate information regarding its
`
`charges and billing rates.
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`79.
`
`Scott was justified in relying on SRAlab to provide accurate information regarding
`
`its charges and billing rates.
`
`80.
`
`Scott’s reliance on SRAlab to communicate with him regarding its charges and
`
`billing rates was reasonable.
`
`81.
`
`As a result of SRAlab’s misrepresentations regarding its charges and billing rates,
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`Scott incurred charges and fees above usual, customary and reasonable.
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`WHEREFORE, Scott seeks damages and judgment as follows:
`
`A.
`
`In favor of Scott and against SRAlab for the difference between usual, customary,
`
`and reasonable charges and the amounts Scott paid for those services; and
`
`B.
`
`In favor of Scott and against SRAlab for its breach of contract, negligence and
`
`negligent misrepresentations in an amount to be determined at trial.
`
`Award Scott the costs of suit and reasonable attorneys’ fees.
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`Award such other and further relief as the Court deems just and proper.
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`C.
`
`D.
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`-9-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 10 of 11 PageID #:1990
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`Dated: March 21, 2022.
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`Respectfully Submitted,
`
`Scott M. Archer
`
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` By:s/ Lisa J. Counters
`
`One of his attorneys
`
`Lisa J. Counters (Admitted Pro Hac Vice)
`
`Schiffman Law Office, P.C.
`4506 N. 12th Street
`
`
`Phoenix, AZ 85014
`lisa@schiffmanlaw.com
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`
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`
`
`John C. Martin
`Sugar Felsenthal Grais & Helsinger, LLP
`30 N. LaSalle Street, Suite 3000
`Chicago, IL 6060
`jmartin@sfgh.com
`
`
`
`
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`
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`-10-
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`

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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 11 of 11 PageID #:1991
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`
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`CERTIFICATE OF SERVICE
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`The undersigned hereby certifies that on March 21, 2022, she caused a true and correct
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`
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`copy of the foregoing to be electronically filed with the Clerk of Court using the CM/ECF
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`system, which will send notification of such filing to all counsel of record.
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`/s/ Lisa J. Counters
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`-11-
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`

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