Court of Appeals of Illinois, First District, Fourth Division
MEDICOS PAIN & SURGICAL SPECIALISTS, S.C., and AMBULATORY SURGICAL CARE FACILTY, LLC, Plaintiffs-Appellees,
TRAVELERS INDEMNITY COMPANY OF AMERICA, and BLACKHAWK STEEL CORP., Defendants-Appellants.
from the Circuit Court of Cook County 12-L-04140 Honorable
Brigid M. McGrath, Judge Presiding
JUSTICE McBRIDE delivered the judgment of the court, with
opinion. Justice Ellis concurred in the judgment and opinion.
Justice Gordon specially concurred, with opinion.
1 Medicos Pain & Surgical Specialists, SC (Medicos), and
Ambulatory Surgical Care Facility, LLC (Ambulatory), provided
surgical care to a machine operator who was injured at work,
Javier Mendoza, but had to wait several years for payment
from Mendoza's employer, Blackhawk Steel Corporation
(Blackhawk), and Blackhawk's workers' compensation
insurer, Travelers Indemnity Company of America (Travelers).
Medicos and Ambulatory filed suit in the circuit court and
were awarded statutory interest pursuant to section 8.2(d) of
the Workers' Compensation Act (Act). 820 ILCS 305/8.2(d)
(West 2010). Section 8.2(d) states that late payments
to a medical service provider "shall incur interest at a
rate of 1% per month payable to the provider." 820 ILCS
305/8.2(d) (West 2010). In this appeal, Blackhawk and
Travelers contend the interest award of $37, 229 entered
against them in 2016 is flawed for multiple reasons,
including that while this appeal was pending, this court
determined in 2017 that Medicos, Ambulatory, and other
medical service providers who sued for statutory interest in
Marque Medicos do not have a private right of action
for the failure of an employer or insurer to comply with the
interest provision of the Act. Marque Medicos Fullerton,
LLC v. Zurich American Insurance Co., 2017 IL App (1st)
160756, 83 N.E.3d 1027, pet. for leave to appeal
denied, No. 122568 (Ill. Nov. 22, 2017). Medicos and
Ambulatory respond that in this instance, however, they
successfully proved the elements of their promissory estoppel
claim seeking statutory interest. Although they make no
attempt to distinguish Marque Medicos, the appellees
also contend there are no grounds for reversing the trial
court's decision. Marque Medicos, 2017 IL App
2 The pertinent facts and legal principles are as follows.
Mendoza severely injured both of his shoulders and lacerated
his nose while at work in mid-2010, when he fell off a truck
from a height of approximately four feet and landed on his
left side. Mendoza was treated in a hospital emergency room
and put on work restrictions until cleared by a physician.
Rest, physical therapy, and other conservative treatment did
not improve Mendoza's mobility or decrease his pain. He
underwent further diagnostic testing, which revealed the
severity of his injuries, and came under the care of
orthopedic surgeon Dr. Ellis Nam, who recommended immediate
surgery on both shoulders. Medicos faxed a one-page surgery
approval request form to Travelers and received its faxed
response before Dr. Nam repaired Mendoza's left rotator
cuff in late 2010. Ambulatory exchanged similar faxes with
Travelers before Dr. Nam repaired Mendoza's right rotator
cuff in early 2011. Medicos and Ambulatory share corporate
offices and are owned by the same physician. The two one-page
forms identified the procedures to be performed and contained
a line for marking "Approved" or
"Denied." Although Travelers ticked the approval
line, the forms do not indicate the amounts that would be
charged for the listed medical services.
3 About two years after Mendoza's accident, Medicos and
Ambulatory attached the approval faxes and other exhibits to
a complaint alleging they issued bills to Travelers and
Blackhawk for $166, 944, but received only $1714. The medical
care providers claimed the insurer and employer were liable
for the remaining balance under the equitable theory of
promissory estoppel, as well as statutory interest under
section 8.2(d) of the Act. 820 ILCS 305/8.2(d) (West 2010).
Under the legal theory of promissory estoppel, " 'a
promise made without consideration may nonetheless be
enforced to prevent injustice if the promisor should have
reasonably expected the promisee to rely on the promise and
if the promisee did actually rely on the promise to his or
her detriment.' " Newton Tractor Sales, Inc. v.
Kubota Tractor Corp., 233 Ill.2d 46, 51, 906 N.E.2d 520,
523 (2009) (quoting Black's Law Dictionary 591 (8th ed.
2004)); Centro Medico Panamericano, Ltd. v. Laborers'
Welfare Fund of the Health & Welfare Department of the
Construction & General Laborers' District
Council, 2015 IL App (1st) 141690, ¶ 12, 33 N.E.3d
691 (setting out the elements the plaintiff must prove). The
defendant's promise must be unambiguous. Newton
Tractor Sales, 233 Ill.2d at 51; Centro Medico,
2015 IL App (1st) 141690, ¶ 12. According to Medicos and
Ambulatory, the two approval faxes amounted to an unambiguous
promise to pay Mendoza's surgical bills (even though the
faxes did not specify an amount or percentage of any charges
or refer to the Act's schedule of allowable medical
fees). Although Medicos and Ambulatory sought the balance of
the medical bills, the complaint suggests the purpose of
their lawsuit was to collect statutory interest, not the
underlying bills. Medicos and Ambulatory titled the first
paragraph of their pleading "Nature of the Case, "
and stated: "1. This suit seeks to recover statutory
interest that has accrued and is immediately due and payable
as a result of medical services provided by Plaintiffs. In
addition, Defendants have damaged Plaintiffs by approving
certain surgical procedures in advance, to induce Plaintiffs
to allow those procedures to be performed in their facility[,
] and thereafter failing to pay for those procedures."
Another indication that the lawsuit was about the statutory
interest, not the underlying bills, is that it is well
established by statute and precedent that compensation owed
for an employee's accidental injuries, including
"all the necessary first aid, medical and surgical
services, and all necessary medical, surgical, and hospital
services thereafter incurred" (820 ILCS 305/8(a) (West
2014)), is an issue over which the Illinois Workers'
Compensation Commission (Commission) has exclusive
jurisdiction and that the role of the circuit court in
compensation proceedings is limited to review only of the
Commission's determinations. Marque Medicos,
2017 IL App (1st) 160756, ¶ 18.
4 Amendments to the Act in 2005 limited the amount that
providers could charge for covered medical services but added
the interest provision of section 8.2(d) of the Act.
Marque Medicos, 2017 IL App (1st) 160756,
¶¶ 19-20 (discussing the history of section
8.2(d)). The 2005 version of section 8.2(d) indicated, in
relevant part, "In the case of nonpayment to a provider
within 60 days of receipt of the bill which contained
substantially all the required data elements necessary to
adjudicate the bill or nonpayment *** [in accordance with]
the fee schedule established in this Section, the bill, or
portion of the bill, shall incur interest at a rate of 1% per
month payable to the provider." Marque Medicos,
2017 IL App (1st) 160756, ¶ 20 (quoting Pub. Act
94-0277, § 10 (eff. July 20, 2005)). Further amendments
to the Act in 2011 reduced the maximum medical fees by 30%
but shortened the 60-day grace period to 30 days and, for the
first time, mandated " '[a]ny required interest
payments shall be made within 30 days after payment.'
" Marque Medicos, 2017 IL App (1st) 160756
(quoting Pub. Act 97-0018, § 15 (eff. June 28, 2011)).
5 Consistent with the Act, Medicos and Ambulatory's
action in the circuit court was stayed pending arbitration of
Mendoza's claim before the Commission. There was no
dispute as to the necessity of Mendoza's two surgeries.
The arbitration proceedings focused on the types of medical
service charges and the amounts, whether penalties and
attorney fees should be imposed, and whether Mendoza, who was
44 when the accident occurred, had been permanently injured.
Mendoza did not seek interest on any of the medical service
6 In February 2013, the arbitrator issued a ruling based on
the testimony, the documentary evidence, and the medical fee
schedule contained in the Act. Travelers had made interim
payments for Mendoza's two surgeries and reduced the
bills by roughly half. The arbitrator determined the
remaining charges were "reasonable and necessary"
and awarded Medico an additional $29, 708 and Ambulatory an
additional $38, 554. The arbitrator rejected Mendoza's
contention that, because the surgeries were preauthorized,
all the bills should have been paid and that he was entitled
to penalties pursuant to sections 19(k) and 19(l) of
the Act and attorney fees pursuant to section 16 of the Act
(820 ILCS 305/16, 19(k), 19(l) (West 2012). The
arbitrator found that although the need for the surgeries had
not been in contention, "there was clearly a
disagreement as to whether all the charges stemming from
those surgeries were reasonable and whether the outstanding
fee schedule charges were accurately calculated [or had been
double billed in error]." The arbitrator also found that
Mendoza was entitled to permanent partial disability
benefits. When Mendoza received the award payment, he
remitted it to Medicos and Ambulatory.
7 The parties to the circuit court case (the employer, the
insurer, and the two surgical care providers) returned to
court and prepared for a bench trial limited to the issue of
interest. Medicos and Ambulatory sought section 8.2(d)
interest totaling $17, 927 for the first surgery, section
8.2(d) interest totaling $19, 303 for the second surgery, and
$2208 in 5% prejudgment interest. 820 ILCS 305/8.2(d) (West
2010). During opening arguments, counsel for Medicos and
Ambulatory made clear that his clients were asserting a
statutory claim only:
"What remains here is purely a claim for interest under
Section [8.2(d)(3)] of the Illinois Workers' Compensation
Act. There are very few factual matters that go into an
analysis of what my clients [are] owed under that statute,
and that's all that's at issue in this trial, Judge.
* * *
Judge, as a brief opening, a couple of remarks. [This is a]
case about payment of interest on late paid medical bills.
There's a provision of the Illinois Workers'
Compensation Act that we've already mentioned, Section
8.2(d)(3)[, ] that sets forth the circumstances under which a
provider of medical services is entitled to the payment of
interest at 1 percent per month on late paid medical bills.
Under Section 8.2(d)(3), the facts that are relevant are: Was
there a medical bill, was that medical bill sent and received
by the ...