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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
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`Case No.: 1:22-cv-00700
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`The Honorable Robert M. Dow, Jr.
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`Scott M. Archer,
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`vs.
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`Rehabilitation Institute of Chicago dba as Shirley
`Ryan Ability Lab, an Illinois non-profit
`corporation,
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`Plaintiff,
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`Defendants.
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`PLAINTIFF’S SECOND AMENDED COMPLAINT
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`Plaintiff Scott Archer (“Scott”) for his Complaint against the Rehabilitation Institute of
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`Chicago DBA Shirley Ryan Ability Lab (“SRAlab”) alleges as follows:
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`PARTIES
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`1.
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`Scott is a resident of Maricopa County, Arizona. Scott is married to Carol Archer
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`(“Carol”).
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`2.
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`Defendant Rehabilitation Institute of Chicago dba as Shirley Ryan Ability Lab is an
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`Illinois non-profit corporation with its principal place of business in Chicago, Illinois.
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`JURISDICTION AND VENUE
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`3.
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`This Court has jurisdiction over SRAlab and the subject matter of this claim under
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`28 U.S.C. § 1332.
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`4.
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`This Court is the proper venue for the matter based on an order from Arizona
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`District Court, dated February 7, 2022.
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`Case: 1:22-cv-00700 Document #: 62 Filed: 03/21/22 Page 2 of 11 PageID #:1982
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`FACTUAL BASIS
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`Archer’s Health Insurance Coverage
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`5.
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`At all relevant times, Scott and his family were covered by an employer-provided
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`health insurance plan underwritten by All Savers Insurance Company, a wholly-owned subsidiary
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`of United HealthCare Services, Inc. In the Arizona District Court action, the Complaint named several
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`United Health entities, including All-Savers Insurance Company, United HealthCare Services, Inc.,
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`UnitedHealthGroup, Inc. and UnitedHealthcare. For purposes of this Complaint, these entities will be
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`collectively identified as UHC.
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`6.
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`Barclay provided insurance under a “self-insured” plan that covered the first
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`$15,000 in medical bills for any individual during a plan year. Barclay also purchased a stop-loss
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`insurance policy from All Savers that covered everything after the first $15,000.
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`7.
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`Scott is a principal at Barclay Group Development Services, LLC (“Barclay”) and
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`he continues to work for Barclay.
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`8.
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`Scott had a history of lumbar back problems including multiple surgeries and
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`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.
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`9.
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`10.
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`After the injection Scott experienced uncontrolled pain at the injection site.
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`On December 14, 2017, Scott arrived at the Banner University Medical Center
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`(“Banner”) ER in Phoenix, Arizona, complaining of progressive upper and lower extremity
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`weakness and decreased motor function. Scott’s knees were buckling, and he was having
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`uncontrolled pain.
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`11.
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`Testing and examination revealed that Scott had diffuse cervical and thoracic
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`edema with osteomyelitis.
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`-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.
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`On December 15, 2017, Scott underwent an emergent C4-T1 laminectomy and C4-
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`T2 fusion.
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`13.
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`Scott’s recovery course was complicated. Scott had acute neurological symptoms,
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`weakness, and was unable to walk. He required significant assistance in performing his activities of
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`daily living.
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`14.
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`Given his condition, Banner discharged Scott to its acute inpatient rehabilitation
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`(“AIR”) facility. By definition, an AIR facility requires the patient to participate in intensive
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`rehabilitation, typically three hours of therapies daily, or be expected to progress to participating in
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`three hours per day. An AIR provides continuous medical supervision and coordinated care
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`between doctors, occupational therapists and physical therapists.
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`15.
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`Scott’s medical team at Banner certified that he had a medical condition that
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`qualified for AIR, and Scott was transferred to Banner’s AIR on December 23, 2017.
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`16. While in AIR, Scott’s upper extremity strength improved, but his lower extremity
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`strength did not. Scott was making slow progress.
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`17.
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`UHC was actively conducting utilization review and approving his continued stay a
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`few days at a time.
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`18.
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`Scott’s lack of progress led UHC to challenge whether he met the criteria for acute
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`rehabilitation.
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`19.
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`UHC advised Carol that Scott could be discharged home and cared for in an
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`outpatient setting.
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`20.
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`Since UHC continued to deny acute rehabilitation and the prospect of taking care of
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`Scott at home petrified Carol, she began researching alternative options for acute rehabilitation.
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`-3-
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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.
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`Carol contacted SRAlab. SRAlab obtained Scott’s records and determined that
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`Scott was medically capable of participating in acute inpatient rehabilitation and agreed to admit
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`him. SRAlab sought authorization for inpatient rehabilitation on January 11, 2018, and UHC
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`denied that request.
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`22.
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`UHC confirmed its decision in a letter dated January 12, 2018. UHC determined
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`that Scott’s ability to perform self-care had plateaued and that outpatient rehabilitation was the
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`proper setting for his care.
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`23.
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`Unfortunately, Scott’s condition worsened while at Banner’s AIR. He ended up
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`back at Banner on January 20, 2018, to treat blood clots, pulmonary emboli and a pressure sore.
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`24.
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`Scott recovered and was ready for discharge from Banner on January 27, 2018.
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`Scott’s physicians advised UHC that inpatient rehabilitation was necessary for Scott and he was
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`fully capable of participating in the required level of therapies.
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`25.
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`26.
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`Carol and Banner lobbied UHC to return Scott to Banner’s AIR.
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`UHC again refused to transfer Scott back to AIR because he was not an appropriate
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`candidate for its services.
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`27.
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`Carol renewed contact with SRAlab to determine whether it would still accept Scott
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`as a patient. SRAlab agreed to admit Scott.
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`28.
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`Before transferring Scott to SRAlab, Carol confirmed that SRAlab was a UHC-
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`contracted facility.
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`29.
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`SRAlab indicated that it could enter into a self-pay agreement since UHC denied
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`preauthorization. It required a $130,928 payment for the first 28 days of care at SRAlab.
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`30.
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`Carol attempted to negotiate a lower self-pay rate; however, SRAlab advised her
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`that it was the “standard” rate.
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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.
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`Carol was clear throughout the admission process that they intended to self-pay so
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`Scott could get better, but they fully intended to pursue appeals and payment from UHC.
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`32.
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`33.
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`34.
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`35.
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`SRAlab agreed to refund any funds due back to Scott if UHC overturned its denial.
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`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
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`recovery after remaining at SRAlab for 57 days through March 26, 2018.
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`36.
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`Scott executed three additional self-pay agreements to cover Scott’s 56 days at
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`SRAlab that each required additional payments. Scott paid SRAlab $283,276.00.
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`37. While at SRAlab, Scott appealed UHC’s denial several times.
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`38.
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`39.
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`40.
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`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.
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`Scott required follow-up MRIs to continue his treatment. SRAlab failed to obtain
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`proper orders for follow-up MRIs and failed to have the MRIs conducted at a contracted facility so
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`that UHC would pay the claims.
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`41.
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`42.
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`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
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`28, 2018 to February 12, 2018 was covered. But UHC never processed payment for the claim and
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`SRAlab never requested payment.
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`43.
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`In fact, SRAlab did not file its claim for services provided to Scott with UHC until
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`December 12, 2018, nearly nine months after Scott’s discharge. SRAlab’s claim was for
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`$329,364.95.
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`-5-
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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.
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`UHC’s explanation of benefits to SRAlab advised that it was entitled to a discount
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`of $202,653.95 and that the maximum amount due to SRAlab for the full stay would have been
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`$126,711.00. UHC also indicated that it would make no payment to SRAlab because it filed the
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`claim past the provider’s timely filing limit, and SRAlab did not seek preauthorization for the
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`services.
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`45.
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`Once Scott received the explanation of benefits, he noted that UHC did not pay
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`SRAlab for the time it agreed to pay. Scott retained counsel, who sought payment for the entire
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`claim, but indicated that UHC needed to at least process payment for the two weeks.
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`46.
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`UHC reprocessed the claim until November 30, 2019. This explanation of benefits
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`reflected payment for the approved timeframe but reaffirmed UHC’s denial of Scott’s remaining
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`days at SRAlab. UHC paid SRAlab $35,568.00. Around January 29, 2020, Scott received a refund
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`check from SRAlab for $70,002.91.
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`47.
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`48.
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`Scott requested an accounting for the refund, and SRAlab would not provide it.
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`In the interim, Scott exhausted his administrative remedies with UHC by filing
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`another appeal in June 2020.
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`49.
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`UHC did not respond not Scott’s June 2020 appeal. Scott filed a lawsuit against
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`UHC and others on December 21, 2020, under ERISA 29 U.S.C. § 1132(a)(1).
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`50.
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`On January 6, 2021, UHC issued a final denial. It advised Scott that SRAlab was
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`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
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`contract, admission notification was required but not received. Therefore, the applicable
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`administrative reimbursement reduction has been applied and deducted from the facility’s
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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
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`administrative reimbursement reduction.”
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`51.
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`UHC further advised Scott that SRAlab was not entitled to bill for these charges.
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`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.
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`Based on UHC’s new basis for denial in January 2021, Scott filed an amended
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`52.
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`complaint and added SRAlab as a party.
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`53.
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`The case between Scott and SRAlab was transferred to this district by order dated
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`February 7, 2022 because the District of Arizona did not have jurisdiction over SRAlab.
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`COUNT I
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`BREACH OF CONTRACT – SRAlab
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`Scott incorporates all previous allegations.
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`On information and belief, SRAlab has a contract with one of the UHC entities as
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`54.
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`55.
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`an in-network provider for UHC’s health insurance products.
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`56.
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`Both Scott and SRAlab confirmed with UHC that it was an in-network provider
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`under Scott’s coverage.
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`57.
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`On information and belief, the contract between SRAlab and UHC prohibits
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`SRAlab from charging UHC insureds for unauthorized and not medically necessary treatment.
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`58.
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`UHC’s final appeal determination concluded that SRAlab was not entitled to charge
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`or collect funds from Scott if services were not medically necessary or preauthorized.
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`59.
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`Scott is a third-party beneficiary of the contract between SRAlab and UHC.
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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.
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`By not reimbursing Scott for what he paid for days 15-56 of his stay, SRAlab
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`breached its contract with UHC.
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`61.
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`SRAlab’s breach of its provider agreement with UHC damaged Scott.
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`COUNT II
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`NEGLIGENCE - SRAlab
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`Scott incorporates all previous allegations.
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`SRAlab had a duty to take every reasonable action to ensure that Scott could secure
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`62.
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`63.
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`payment for his stay from his insurer.
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`64.
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`65.
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`66.
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`SRAlab had a duty to obtain preauthorization for medical care and treatment.
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`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
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`and for any diagnostics or other procedures that could be covered for Scott.
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`67.
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`68.
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`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
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`after Scott’s discharge from SRAlab.
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`69.
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`70.
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`In part, UHC denied SRAlab’s claim because it was filed late.
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`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.
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`72.
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`73.
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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
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`with usual, customary, and reasonable charges collected from insurers and patients.
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`75.
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`SRAlab led Scott to believe that he was paying rates similar to what UHC would
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`pay if the claim were approved.
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`76.
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`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.
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`SRAlab knew that Scott would rely on it for accurate information about charges
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`and billing rates.
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`78.
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`Scott relied on SRAlab to provide him with accurate information regarding its
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`charges and billing rates.
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`79.
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`Scott was justified in relying on SRAlab to provide accurate information regarding
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`its charges and billing rates.
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`80.
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`Scott’s reliance on SRAlab to communicate with him regarding its charges and
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`billing rates was reasonable.
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`81.
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`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:
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`A.
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`In favor of Scott and against SRAlab for the difference between usual, customary,
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`and reasonable charges and the amounts Scott paid for those services; and
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`B.
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`In favor of Scott and against SRAlab for its breach of contract, negligence and
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`negligent misrepresentations in an amount to be determined at trial.
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`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.
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`D.
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`-9-
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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,
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`Scott M. Archer
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` By:s/ Lisa J. Counters
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`One of his attorneys
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`Lisa J. Counters (Admitted Pro Hac Vice)
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`Schiffman Law Office, P.C.
`4506 N. 12th Street
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`Phoenix, AZ 85014
`lisa@schiffmanlaw.com
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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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`-10-
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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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`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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`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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