USC, Kaiser Tangle over $544K Bill
By Barbara Wallace
5-28-2014 20:10:00

     LOS ANGELES (CN) - Kaiser transferred a patient to avoid paying for his care, the University of Southern California claims in Los Angeles County court.

     Keck Hospital of USC sued Kaiser Foundation Health Plan, Inc. Kaiser Foundation Hospitals and The Permanente Medical Group, Inc. claiming fraud, deceit, negligent misrepresentation and a litany of contract-related actions over a nearly $544,000 bill.

     The university says an unnamed patient was in Kaiser Permanente Los Angeles Medical Center’s ICU, where doctors determined he needed open heart surgery for a valve replacement. Although Kaiser had the ability to do the surgery, USC says Kaiser instead approached its Keck Hospital for the surgery because the man had exceeded his annual benefit limit of $75,000.

     “All additional care the patient required would not be covered under the patient’s Kaiser policy and instead would be uncompensated,” USC says in its complaint. “Defendants agreed upon a plan to transfer the patient to a non-Kaiser hospital.”

     An unidentified Kaiser representative then allegedly called Keck Hospital and said Kaiser wanted to transfer the patient so he could have a higher level of care. The rep said the patient had active Kaiser coverage and that Kaiser would pay. None of this was true, according to USC’s complaint.

     Kaiser should have disclosed that the patient’s benefit maximum had been exceeded and described him as “self-pay” or “self-insured.” Instead, Kaiser faxed Keck Hospital with the patient’s diagnosis and condition but omitted the key insurance information, according to the complaint.

     Based on Kaiser’s word, Keck accepted the transfer and provided the patient with $543,838 in medical services over the next 13 days, the university says. And shortly before the patient was discharged, a Kaiser representative named Joanne told Keck’s case manager that Kaiser “denied authorization for the transfer and admission of the patient to an acute rehabilitation hospital facility, but authorized the patient’s transfer and admission to a skilled nursing facility level of care under contract with Kaiser,” the complaint states.

     Joanne also asked Keck for clinical information about the patient which would have been subject to patient privacy restrictions, which gave the hospital the impression that he was covered by Kaiser. Hospitals are required to limit such disclosures to the “minimum information necessary” to provide care and arrange payment, according to the complaint.

     “By requesting from Keck private, confidential and protected health information regarding the patient, the patient’s medical condition, and the medical care Keck provided to the patient, by arranging for the patient’s transfer to a Kaiser-contracted facility and by authorizing the patient to be transferred and admitted to a skilled nursing facility, rather than an acute rehabilitation hospital, Joanne impliedly represented to Keck that KFHP coverage existed,” USC says in its complaint, adding that Joanne never mentioned the patient had exceeded his policy limits either.

     After transferring the patient to the Kaiser-contracted skilled nursing facility Keck sent its bill to Kaiser, which denied the claim. Keck says it learned about the benefit limit only after Kaiser denied the claim.

     USC seeks damages of $543,848.16 plus interest, costs and attorney fees. It is represented by Carrie McLain and Kim Worobec of the Helton Law Group in Huntington Beach, Calif.