Hospitals Sue Kaiser for Unilaterally Changing Payment Contract

3-12-2013 14:10:00

    LAWRENCEVILLE, Ga.(CN) - North Fulton Medical Center and several other former members of Kaiser's provider network have sued Kaiser for nonpayment and unilaterally changing the parties' contract, in a complaint filed in Gwinnet County Superior Court.
     The hospital plaintiffs and Kaiser, in 2008, signed an agreement that Kaiser must pay for treatment of its members within ten days, in exchange for a 3 percent discount, the complaint says.
     But, Kaiser began withholding full or partial reimbursements for medically necessary care in 2010, according to the complaint.
     The out-of network hospitals explain in their complaint:
     "Rather than comply with the terms of the agreement, Kaiser unilaterally decided to reimburse the hospitals at rates and amounts significantly below those required by the agreement.
    "To justify its wrongful payment decisions, Kaiser hired The Assist Group, Inc.and other third-party auditors to manufacture billing disputes that Kaiser then used as pretext to deny or underpay the hospitals' claims for reimbursement.
   "Upon information and belief, Kaiser reimbursed the third-party auditors for their services by paying them a percentage of the amounts that Kaiser withheld from the Hospitals.
    "Kaiser compounded the hospitals' injury and further breached the agreement by applying the three-percent discount to patient accounts where Kaiser had already underpaid the hospitals for their services.
     "Kaiser also applied the three-percent discount to patient accounts where Kaiser paid the hospitals more than ten days after receiving their claims for reimbursement."
     The hospitals seek reimbursement with interest, a declaratory judgment that the parties will return to the agreement signed in 2008, and attorneys' fees and litigation costs.
     The plaintiffs are represented by George L. Murphy Jr. and Corin M. McCarthy of Kilpatrick Townsend & Stockton LLP in Atlanta.