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Rulings Send Lawsuits Against State Farm, American Family Back to Court, Hagens Berman Sobol Shapiro Announces
Date:9/24/2007

DENVER, Sept. 24 /PRNewswire/ -- The Colorado Court of Appeals handed State Farm Mutual Automobile Insurance Company a defeat by reversing a trial-court ruling supporting the insurance giant's use of a computer database to determine reimbursements of medical costs.

The ruling, issued September 20, opens the door for a class-action lawsuit to move forward that would represent physicians and patients who had payments from State Farm unilaterally reduced after the insurance company processed the charges through Sloans Lake Auto Injury Management, a medical database that ostensibly compares physician charges against "same or like services" in a geographic region."

In October of 2001, Pauline Reyher was injured in an auto accident and was treated by La Junta, Col. physician Wallace Brucker, the area's only orthopedic surgeon. Under Reyher's State Farm no-fault insurance policy, State Farm was obligated to pay "all reasonable and necessary expenses for medical" care.

According to the original complaint filed February 10, 2003, Brucker treated Reyher and submitted the charges to State Farm. State Farm, in turn, processed the bills and reduced the payments by various amounts, claiming the database showed other physicians in the geographic area charged less for the similar services.

According to attorney Rob Carey of Hagens Berman Sobol Shapiro, there was a problem with State Farm's conclusion: Brucker is the only doctor in his area who performs the type of medical services Reyher required.

"We argued in that State Farm's review did not consider the specific circumstances that made his charges reasonable," Carey noted.

In a 3-0 decision, Judge Hawthorne remanded the case to the trial court that originally dismissed Reyher and Brucker's case and granted summary judgment to State Farm.

The Court's decisions found that Brucker's arguments that the computer database used to determine "reasonable" reimbursement of medical costs was
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SOURCE Hagens Berman Sobol Shapiro
Copyright©2007 PR Newswire.
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