A group of South Side podiatrists will appeal an Illinois court ruling that may allow insurance companies to withhold payments from medical groups if they are not properly registered with the state.
Attorneys for Chicago-based Chatham Foot Specialists say the podiatry group has been unable to recoup more than $1 million in medical claims from Blue Cross and Blue Shield of Illinois. The state’s largest insurer won’t pay Chatham because it did not have a corporate certificate of registration with the state.
The ruling could be problematic for physicians, podiatrists, dentists and other medical professionals throughout the state if health plans find their corporations are not registered with the Illinois Department of Financial and Professional Regulation. Even if providers are registered as individuals, their corporations also must be registered if they are incorporated, the state says.
Blue Cross, the state’s largest insurer, won’t pay Chatham because it was not registered with the state. The 1st District Appellate Court said in a June 30 ruling that a contract between Chatham and Blue Cross was void because the podiatrists’ professional corporation didn’t comply with state licensing requirements because it wasn’t registered with the state.
Illinois Blue Cross wouldn’t comment about the court’s ruling or its dispute with Chatham other than to say its contract with the medical group required it to have a certificate of registration with the state.
Chatham plans to appeal the ruling to the Illinois Supreme Court by the end of this month, its attorneys said.
State figures show there were 3,261 medical corporations registered with the state on June 30, said Clare Thorpe, spokeswoman for the state department of financial and professional regulation. The state doesn’t track unregistered incorporated medical groups, but attorneys for Chatham said there are “hundreds” that are not registered.
“If [medical-care providers] are incorporated and don’t have a certificate on file, they are operating illegally if you believe the court,” said Chatham’s attorney, John Roberts of the Chicago law firm Wildman, Harrold, Allen & Dixon.
Chatham tried to settle the dispute, which began four years ago, by simply paying $50 for a certificate, but they were still denied payment and subsequently lost in court because they didn’t have a certificate on file when they engaged in a contract dispute, Roberts said.
The appellate court, agreeing with the Cook County Circuit Court, said that allowing medical-care providers to be unlicensed increases risk to patients.
But Chatham attorney Roberts says all providers in the group were registered with the state as individuals.
“There is no public safety issue,” Roberts said. “Blue Cross can take the premium from the patient and not pay the providers even though the individual provider has a license.”
Meanwhile, Roberts said, Chatham’s business has suffered.
The corporation now has only three podiatrists, down from eight when the dispute began in 2000, because, he says, it can’t be a part of Illinois Blue Cross’ provider networks, which can serve more patients than any other commercial insurer in the state.
Since 2000, when Chatham’s relationship with Blue Cross was terminated, Roberts says it has lost one-third of its cash flow.