2016 IL App (1st) 151081
Ill. App. Ct.2016Background
- Centro Medico Panamericano (an out-of-network ambulatory surgical facility) treated an insured patient who assigned benefits to Centro Medico and billed about $86,000 for a spinal cord stimulator implantation.
- Before surgery, Centro Medico requested benefits/eligibility verification from Benefits Management Group (third-party administrator); a verification form noted “Facility Coverage: 60%.”
- Centro Medico understood this as 60% of its billed charges; Benefits Management applied a usual, customary, and reasonable (UCR) adjustment, reducing eligible charges to about $10,204.59 and paid ~ $6,000 after coinsurance.
- Centro Medico sued under promissory estoppel seeking the difference between billed charges and amounts paid, alleging Benefits Management promised coverage expressed as a percentage of billed charges and failed to disclose limits.
- Benefits Management moved for summary judgment arguing (1) ERISA preemption and (2) there was no unambiguous promise or reasonable reliance; the trial court denied preemption but granted summary judgment on promissory estoppel grounds.
- The appellate court affirmed: no clear, unambiguous promise that reimbursement would be 60% of billed charges and Centro Medico’s reliance was not reasonable as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Benefits Management made an unambiguous promise to pay 60% of Centro Medico’s billed charges | Perales’s verification notes and testimony show agent stated facility coverage was 60%, which Centro relied on as 60% of billed charges | The verification only recorded “60%” without specifying basis; agent (via HCM) lacked plan-access and UCR limits apply, so no clear promise to pay 60% of billed charges | No. Court: promise ambiguous — parties disagreed whether 60% applied to billed charges or to UCR-adjusted charges |
| Whether Centro Medico reasonably and justifiably relied on the alleged promise | Centro proceeded with surgery and billing after the verification; reliance was foreseeable | Reliance was unreasonable because industry practice and documentation indicate UCR adjustments; provider was an out-of-network, non-negotiated rate provider | No. Court: reliance not reasonable as matter of law given facts and industry norms |
| Whether the promissory estoppel claim is preempted by ERISA | Centro: not at issue on appeal (argued below that ERISA did not preempt) | Benefits Management: argued ERISA preemption (trial court denied) | Court declined to decide preemption because summary judgment proper on estoppel grounds |
| Whether summary judgment was appropriate overall | Centro: disputed material facts (content of call, promise) preclude summary judgment | Benefits Management: undisputed record shows ambiguity and unreasonable reliance justifying summary judgment | Granted for Benefits Management; affirmed on appeal |
Key Cases Cited
- Newton Tractor Sales, Inc. v. Kubota Tractor Corp., 233 Ill. 2d 46 (Ill. 2009) (elements of promissory estoppel in Illinois)
- Matthews v. Chicago Transit Authority, 2016 Ill. 117638 (Ill. 2016) (promissory estoppel elements and Illinois precedent)
- Quake Construction, Inc. v. American Airlines, Inc., 141 Ill. 2d 281 (Ill. 1990) (promissory estoppel discussion)
- Chatham Surgicore, Ltd. v. Health Care Service Corp., 356 Ill. App. 3d 795 (Ill. App. 2005) (reasonable and justifiable reliance requirement for promissory estoppel)
- Cozzi Iron & Metal, Inc. v. U.S. Office Equipment, Inc., 250 F.3d 570 (7th Cir. 2001) (Illinois-law principle that reliance can be decided as matter of law)