EMERUS HOSPITAL PARTNERS, LLC, et al., Plaintiffs, v. HEALTH CARE SERVICE CORPORATION, et al., Defendants No. 13 C 8906 United States District Court, N.D. Illinois, Eastern Division Signed November 19, 2015 Counsel J. todd Trombley, Pro Hac Vice, Alexander B. Klein, III, The Klein Law Firm, Houston, TX, Carlton E. Odim, Odim Law Offices, Chicago, IL, for Plaintiffs. Martin J. Bishop, Rebecca R. Hanson, Meredith Ann Shippee, Thomas Charles Hardy, Reed Smith LLP, Chicago, IL, for Defendant Health Care Service Corporation. Meredith Ann Shippee, Thomas Charles Hardy, Reed Smith LLP, Chicago, IL, for Defendant Blue Cross Blue Shield of Texas. Charles M. Gering, Pedersen & Houpt, Chicago, IL, Alexander B. Klein, III, The Klein Law Firm, Houston, TX, for Defendant Availity. Rowland, Mary M., United States Magistrate Judge ORDER *1 Defendants’ Motion to Compel [64] is GRANTED IN PART AND DENIED IN PART. Defendants’ request for costs is DENIED. STATEMENT A. Background Plaintiffs are a group of health care providers and physicians who provide emergency care services to Texas patients. Defendants are insurers as defined in the Texas Prompt Pay Act (TPPA). From November 1, 2009, through the present, Plaintiffs provided out-of-network—nonpreferred—emergency care services to patients insured by Defendants. Plaintiffs allege that Defendants violated the TPPA Tex. Ins. Code §§ 843.001–.464, 1301.101–.202. As stated in previous orders, the TPPA requires an insurer to act on a “clean claim” submitted by a preferred provider within a specified deadline.[1] Tex. Ins. Code §§ 843.336, 843.338, 1301.101, 1301.103. Failure to adhere to these provisions can result in penalties which increase “with the extent of the insurer's delay in responding to the claims” and the award of attorneys’ fees. Health Care Serv. Corp. v. Methodist Hosps. of Dallas, No. 13 C 4946, 2015 U.S. Dist. LEXIS 54357, at *13 (N.D. Tex. Jan. 28, 2015); see Tex. Ins. Code §§ 1301.137, 1301.108. The TPPA also applies to out-of-network—nonpreferred—providers, like Plaintiffs, if they provide: “(1) care related to an emergency or its attendant episode of care as required by state or federal law; or (2) specialty or other medical care or health care services at the request of the insurer or an in-network provider because the services are not reasonable available from a provider within the network.” Team Healthcare/Diagnostic Corp. v. Blue Cross & Blue Shield of Texas, No. 10 C 1441, 2012 WL 1617087, at *3 (N.D. Tex. May 7, 2012).; see Tex. Ins. Code §§ 843.351, 1301.069. B. Discovery Requests Defendants challenge as inadequate Plaintiffs’ responses to several of Defendants’ First Request for Production, First and Second Set of Interrogatories, and First Requests for Admissions. (Dkt. 64 at 15–16). Defendants also move to compel a proper privilege log and request fees for the preparation of this filing. The Federal Rules of Civil Procedure allow parties to “obtain discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” Fed. R. Civ. P. 26(b)(1). But “requested discovery must be tied to the particular claims at issue in the case.” Sykes v. Target Stores, No. 00 C 5112, 2002 WL 554505, at *3 (N.D. Ill. Apr. 15, 2002); see Bond v. Utreras, 585 F.3d 1061, 1075 (7th Cir. 2009). “Courts commonly look unfavorably upon significant restrictions placed upon the discovery process” and the “burden rests upon the objecting party to show why a particular discovery request is improper.” Kodish v. Oakbrook Terrace Fire Prot. Dist., 235 F.R.D. 447, 450 (N.D. Ill. 2006); see Cannon v. Burge, No. 05 C 2192, 2010 WL 3714991, at *1 (N.D. Ill. Sept. 14, 2010) (“The federal discovery rules are liberal in order to assist in trial preparation and settlement.”). 1. Request for Production Nos. 1, 3, 10, 11, 13, 16, 17, 25 and 26 *2 Requests 1, 3, 10 and 11 seek to identify the medical claims at issue in the case. Requests 13, 16, and 17 seek information verifying that the health care services provided for each claim are emergency care services and that they were provided in an emergency facility as required by the TPPA. Requests 25 and 26 seek the medical records underlying each of the claims at issue in this case. Identifying the underlying medical claims at issue in the case has been an ongoing challenge. Plaintiffs believe that identifying the underlying claims is unnecessary. They contend that “[a]ccording to the plain language of §§ 1301.103 and 843.338 of the Texas Insurance Code, Defendants were required to pay or dispute the cleanliness of each individual claim within 30 days (electronic claims) or 45 days (nonelectronic claims) of the claim being submitted by Plaintiffs.” (Dkt. 75 at 13). Plaintiffs argue that by failing to dispute whether each claim was clean within that deadline, Defendants have waived the right to do so under Texas law. (Id. at 14). Therefore, Plaintiffs conclude, the individual medical claims are irrelevant. Plaintiffs are free to assert this argument when the matter is decided on the merits. However, this Court has determined that Defendants are entitled to production of the data concerning the medical claims that Plaintiffs are putting at issue in the case.[2] Accordingly, the Court has held several hearings over the past four months to determine if there is a method to efficiently harvest Plaintiffs’ EDI data and identify the medical claims at issue in this case. (Dkt. 112, 130, 138, 182, 204, 210, 218, 220). Plaintiffs have been cooperative and diligent in this effort, including consulting with multiple EDI experts. (See, e.g., Dkt. 218) (describing Plaintiffs’ claims data files and the cost to extract it).[3] Defendants’ requests to compel information response to Requests 1, 3, 10, 11, 13, 16, 17, 25, and 26 is GRANTED IN PART. Plaintiffs shall continue to work diligently with Defendants to determine how to efficiently harvest the underlying medical claims data at issue in this case. Because the TPPA applies only if a nonpreferred provider submits a payable, clean claim for emergency services required by state or federal law, the data should provide all available information to determine whether the claim submitted met these TPPA requirements. Further, the data should identify those claims that Plaintiffs allege were late paid or under/unpaid. However, to the extent that the Requests seek individual claims files, including correspondence, notes, proof of payment, member ID cards, proof of insurance, and medical and patient records (see, e.g., Request No. 1), such Requests are relevant but premature. Plaintiffs contend that the medical records are not relevant, again arguing that Defendants have waived the right to contest whether the claims are payable by failing to timely dispute the cleanliness of the claims. But, as discussed above, Plaintiffs’ interpretation of the TPPA requirements is arguably at odds with the statute. In any event, the broad discovery rules allow Defendants to determine if the emergency services in question were required by state or federal law. Emergency Health Ctr. at Willowbrook, L.L.C. v. UnitedHealthcare of Texas, Inc., 892 F. Supp. 2d 847, 851 (S.D. Tex. 2012). However, until the underlying claims are identified, the Court will not compel production of the underlying medical records. Further, depending on the number of underlying claims, the Court will discuss with the parties whether sampling of underlying medical records will suffice. 2. Request for Production No. 5 *3 Request 5 seeks documents related to the attorneys’ fees and costs incurred by Plaintiffs in this action, including attorney engagement letters, invoices, and time and expense records. Plaintiffs object that the request seeks information protected by the attorney-client privilege and work product doctrine. “A party seeking to recover attorneys’ fees ultimately bears the burden of presenting sufficient evidence from which the trial court can render a decision as to their reasonableness.” Fed. Deposit Ins. Corp. v. Lowis & Gellen LLP, No. 11 CV 5902, 2014 WL 656660, at *7 (N.D. Ill. Feb. 20, 2014). Further, attorneys’ fee information “falls outside the scope of the privilege because fees are incidental to the substance of representation.” United States v. Leonard-Allen, 739 F.3d 948, 953 (7th Cir. 2013), as amended on denial of reh'g and reh'g en banc (Aug. 29, 2013). While Plaintiffs can choose to redact privileged information from their time and expense records, they assume a risk that the fact finder will decline to award the full requested amount. See Bretford Mfg. v. Smith Sys. Mfg. Co., 421 F.Supp.2d 1117, 1129 (N.D. Ill. 2006) (awarding only 60 percent of requested fees in view of inadequate documentation and invoice descriptions). Plaintiffs also contend that their “Power of Attorney”—engagement letter—contains confidential and privileged information and requests the Court to conduct an in camera review. Defendants’ request to compel documents responsive to Request 5 is GRANTED IN PART. Plaintiffs shall produce all nonprivileged documents responsive to this request by December 18, 2015. Plaintiffs shall provide the Court with a copy of their “Power of Attorney” for an in camera review by December 4, 2015. 3. First Interrogatory Nos. 2 and 7 First Interrogatory Nos. 2 and 7 seek specific information related to the claims at issue in this case. As discussed above, Defendants are entitled to this information. However, an interrogatory request is not an efficient method of identifying this information. Instead, the Court will continue to work with the parties to secure the production of the data. Defendants’ request to compel further responses to First Interrogatory Nos. 2 and 7 is DENIED WITHOUT PREJUDICE. 4. First Interrogatory No. 3 First Interrogatory No. 3 seeks the identify of persons with knowledge or information related to the claims asserted in the Complaint. Plaintiffs responded with a list of seven officers and directors. (Dkt. 75, Ex. 1). The Court finds that Plaintiffs fully responded to this request. Defendants’ request to compel a further response to First Interrogatory No. 3 is DENIED. 5. First Interrogatory Nos. 8 and 9 First Interrogatory Nos. 8 and 9 seek the efforts undertaken by Plaintiffs to analyze the claims at issue in this case. Plaintiffs do not dispute that this information is relevant. (Dkt. 75 at 8–9). Instead, they responded by identifying the persons who participated in the process and the spreadsheet of claims data produced. (Id.). But these responses do not satisfy the level of detail sought in the requests. Defendants’ request to compel further responses to First Interrogatory Nos. 8 and 9 is GRANTED. Plaintiffs shall supplement their responses no later than December 18, 2015, by explaining in detail the process and efforts undertaken to identify or analyze the claims at issue as qualifying for statutory penalties under the TPPA. 6. Requests for Admissions Nos. 1–5, 6, 8–12, and 28–31 and Second Interrogatory No. 2 *4 Plaintiffs responded to Defendants’ Requests for Admission by denying every request. And Plaintiffs refused to explain its denials in response to Defendants’ Second Interrogatory No. 2. Defendants contend that many of Plaintiffs’ denials are factually incorrect. (Dkt. 64 at 13). Defendants also argue that seeking an explanation for admissions denials via interrogatories is proper. (Id. at 14). The Court finds that some of Plaintiffs’ denials are implausible. For example, in denying Requests 1–5, Plaintiffs fail to admit that it did not have a written agreement on rates of reimbursement with Defendants for the relevant time period. (Dkt. 64, Ex. L). These denials directly contradict Plaintiffs’ allegations that at the time the emergency care was provided to these patients, Plaintiffs were out of network providers, meaning that Plaintiffs did not have a written provider contract with Defendants by which Plaintiffs and Defendants had agreed upon particular fee for service rates for the provision of emergency care to Defendants’ insureds. (Complaint ¶ 23). While Plaintiffs are free to assert their denials, they are cautioned that “a party who, without good reason, refuses to admit a matter will be required to pay the costs incurred in proving that matter.” 8B Charles Alan Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure § 2265, at 401 (3d ed. 2010); see Fed. R. Civ. P. 37(c)(2) (“If a party fails to admit what is requested under Rule 36 and if the requesting party later proves ... the matter true,” the Court “must” award costs and attorney's fees.”). Because the Federal Rules are intended “to secure the just, speedy, and inexpensive determination of every action,” Fed. R. Civ. P. 1, parties should not “view requests for admission as a mere procedural exercise requiring minimally acceptable conduct,” Marchand v. Mercy Med. Ctr., 22 F.3d 933, 936 (9th Cir. 1994). Instead, parties “should focus on the goal of the Rules, full and efficient discovery, not evasion and word play.” Marchand, 22 F.3d at 936–37 (ruling that trial court acted within its discretion in imposing $205,798 in fees and costs for defendant's failure to admit a number of matters); see Unique Envelope Corp. v. GS Am., Inc., 331 F. Supp. 2d 643, 659–60 (N.D. Ill. 2004) (plaintiff was entitled to recover expenses when defendant failed to make a reasonable inquiry before denying requests for admissions); S.E.C. v. Happ, 392 F.3d 12, 33 (1st Cir. 2004) (affirming $87,036 sanction against SEC for its refusal to stipulate until mid-trial that a telephone call was not made on a certain date from a specific office). While the Court will not compel revised responses to the Requests to Admit, with the aforementioned caution in mind, the Court will allow Plaintiffs 14 days to submit revised responses to Requests for Admissions 1–5, 6, 8–12 and 28–31. Plaintiffs’ refusal to respond to Second Interrogatory No. 2, however, is improper. See Flo-Con Sys., Inc. v. Servsteel, Inc., No. 86 C 469, 1988 WL 74824, at *1 (N.D. Ind. June 3, 1988) (ordering party to respond to interrogatory which requested party to explain the reasons for denying a request to admit); see also Design Basics, LLC v. Campbellsport Bldg. Supply Inc., No. 13-C-0560, 2014 WL 3738041, at *4 (E.D. Wis. July 29, 2014) (allowing an interrogatory which sought reasons for denying a request to admit). Defendants’ request to compel an answer to Second Interrogatory No. 2 is GRANTED. For every Request to Admit Plaintiffs deny, Plaintiffs shall fully respond to this request by January 8, 2016. C. Privilege Log *5 Defendants contend that the privilege log submitted by Plaintiffs is legally insufficient because it does not “describe the nature of the documents, communications, or tangible things not produced or disclosed—and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.” Fed. R. Civ. P. 26(b)(5)(A)(ii). Merely describing an item withheld as “correspondence” (Dkt. 64, Ex. N) does not provide the level of detail required by Rule 26. Plaintiffs did not respond to this issue, which arguably waives any arguments they may have. Sloan Valve Co. v. Zurn Indus., No. 10 C 204, 2012 WL 5499412, at *1 (N.D. Ill. Nov. 13, 2012) (failure to properly respond to discovery motion arguments results in waiver); see United States v. Foster, 652 F.3d 776, 792 (7th Cir. 2011) (“As we have said numerous times, undeveloped arguments are deemed waived [.]”). In any event, the Court finds that Plaintiffs’ privilege log is insufficient. Defendants’ request to compel a privilege log that satisfies Rule 26 requirements is GRANTED. Plaintiffs log “must describe the nature of the documents or communications not produced in a manner that, without revealing any potentially privileged information, will enable the other parties to assess the claim.” Babych v. Psychiatric Solutions, Inc., 271 F.R.D. 603, 608 (N.D. Ill. 2010). D. Request for Costs Defendants’ request for costs for the preparation and filing of their motion is DENIED. Footnotes [1] A “clean claim” is a nonelectronic or electronic claim submitted to an insurer that complies with all the necessary elements as set forth in the TPPA. Tex. Ins. Code § 1301.131. [2] Despite their objections, Plaintiffs produced a 9,248 page spreadsheet containing what they described as claims data. (Dkt. 75 at 4). However, the spreadsheet does not include sufficient information to uniquely identify the individual claims at issue. (Dkt. 81 at 1–5). Further, it contained data that was clearly not relevant (e.g., claims for patients covered by a different insurance company). Finally searching Defendants’ database with information included on the spreadsheet “often results in multiple matches, with no way to tell which of the claims returned in the search results is actually the claim at issue.” (Id. at 2). [3] Currently, the parties are exploring harvesting the data from the third party medical clearinghouses via subpoena.