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Laws-info.com » Cases » Illinois » 5th District Appellate » 1999 » May v. SmithKline Beecham Clinical Laboratories, Inc.
May v. SmithKline Beecham Clinical Laboratories, Inc.
State: Illinois
Court: 5th District Appellate
Docket No: 5-98-0428
Case Date: 04/14/1999

May v. SmithKline Beecham Clinical Laboratories, Inc., No. 5-98-0428

5th District, April 14, 1999



MARTHA ANN MAY, on behalf of herself and all others similarly situated,

Plaintiff-Appellee,

v.

SMITHKLINE BEECHAM CLINICAL LABORATORIES, INC.,

Defendant-Appellant.

Appeal from the Circuit Court of Madison County.

No. 97-L-1230

Honorable David R. Herndon, Judge, presiding.

JUSTICE CHAPMAN delivered the opinion of the court:

Plaintiff, Martha Ann May, filed a putative class action lawsuit against defendant, SmithKline Beecham Clinical Laboratories, Inc. (SBCL), based upon SBCL's alleged improper billing for medical laboratory tests. SBCL sought to have plaintiff's case stayed pursuant to section 2-619(a)(3) of the Civil Practice Law (735 ILCS 5/2-619(a)(3) (West 1996)) because eight other putative class actions are pending against SBCL across the country. The trial court denied SBCL's motion to stay, and SBCL filed this interlocutory appeal pursuant to Supreme Court Rule 307(a)(1) (166 Ill. 2d R. 307(a)(1)). We affirm for the reasons set forth below.

BACKGROUND

In 1997, a settlement agreement between SBCL and the United States government was made public. The settlement agreement resulted from qui tam ("whistleblower") lawsuits filed on behalf of the government against SBCL. The agreement required SBCL to pay $325 million in restitution for improper medical claims submitted and paid under government health plans. The settlement agreement did not provide for restitution to be made to the following: members (i.e., patients) of the government health plans for co-payments made, private third-party payers or their members, or patients who directly paid for the medical services provided by SBCL. As a result of the settlement agreement, this case and eight other putative class action lawsuits, which claimed damages from improper billing practices, were filed on behalf of patients who paid SBCL either directly or under a co-payment agreement with their insurance. Additionally, two smaller putative class actions have been filed (one on behalf of certain employee benefit plans and the other on behalf of certain New York patients). Finally, in September 1997, a non-class action case, with 37 insurance companies as named plaintiffs, was filed against SBCL in a Federal district court in Connecticut.

This case was the sixth putative class action case to be filed. Out of the nine lawsuits filed, all but this case have been either filed in or transferred by the Judicial Panel on Multidistrict Litigation to the United States District Court for the District of Connecticut, where the cases have been consolidated and pretrial proceedings are being conducted under the designation of "MDL-1210," entitled "In re SmithKline Beecham Clinical Laboratories, Inc. Laboratory Test Billing Practices Litigation."

In each of the nine class action suits filed, the putative plaintiffs' lawsuits were based on SBCL's settlement agreement with the United States government, and most of the putative class actions filed recite the same "overall scheme" used by SBCL to implement the improper billing practices. SBCL's "scheme" allegedly involves the following improper billing practices: (1) add-ons, i.e., billing for tests not ordered by physicians, (2) unbundling, i.e., billing separately for tests that should have been billed at a single composite rate, (3) double billing, i.e., billing twice for the same test, (4) up-coding, i.e., performing and billing for more expensive tests than ordered, and (5) code-jamming, i.e., inserting fabricated diagnosis codes to obtain reimbursement from third-party payers.

The bases of the various causes of action stated in the complaints are as follows: violation of the Racketeering Influenced and Corrupt Organizations Act (18 U.S.C.

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