Kaiser Stiffs Hospital for Millions, Suit Says
1-11-2019 23:59:00

SAN BERNARDINO, Calif. (CN) – Yet another California hospital has sued Kaiser for underpayment of medical care provided to Kaiser plan members, according to a suit filed in San Bernardino County Superior Court.

Victor Valley Global Medical Center, Inc. sued Kaiser Foundation Hospitals and Kaiser Foundation Health Plan, Inc. for breach of implied contract, value of services rendered, restitution, account stated, intentional violation of duty to pay for emergency medical services, injunctive and equitable relief under the Business and Professions Code and declaratory relief.

Victor Valley is a non-Kaiser hospital, which like all hospitals in California, must provide emergency services to patients regardless of insurance coverage. However, defendant Kaiser is also required to reimburse non-Kaiser hospitals for such emergency care provided by non-plan hospitals to its plan members under the Knox-Keene Act and other California regulations, according to the suit.

Victor Valley says it’s “reasonable and customary rates” are published on the California Office of Statewide Health Planning and Development website, as required by the Health and Safety Code, and Kaiser also has copies of those rates that have been submitted with Victor Valley’s invoices to Kaiser for patient care.

Kaiser routinely pays a fraction of the billed amounts, or nothing at all, according to the action. Kaiser’s response to Victor Valley’s bills is “arbitrary and unpredictable,” in some cases more than half the bill is paid, in others less than half, and in others nothing has been paid. In some instances, Kaiser has “held payment on large patient claims hostage unless [Victor Valley’s] staff ‘agreed’ to accept a far lesser rate of reimbursement,” the suit says. In addition, Kaiser routinely pays late.

Victor Valley notes that Kaiser has been fined by the California Department of Managed Healthcare twice “for violating the minimum legal threshold of paying 95 percent of their claims correctly,” evidencing a “a larger and continuing strategy, scheme and pattern of practice” of intentionally underpaying for healthcare provided to its members and shifting the burden to the non-plan providers to fight for payments.

This suit joins a raft of similar suits, such as Physicians for Healthy Hospitals, Inc. v. Kaiser, filed in Riverside County Superior Court in November 2018, Orange County Global Medical Center v. Kaiser, filed in Orange County Superior Court in October 2018, NorthBay Healthcare Group v. Kaiser, filed in Alameda County Superior Court in September, 2018, University of Southern California and Hospital of USC v. Kaiser, filed in Los Angeles Superior Court in December 2017, and Los Robles Regional Medical Center v. Kaiser, filed in Alameda County Superior Court in October 2017.

The suits allege that Kaiser refuses to pay, or underpays, for medically necessary procedures provided by non-Kaiser hospitals or care centers to Kaiser plan members. The practice drains resources from regional or smaller healthcare systems, impeding their ability to compete with the Kaiser juggernaut, according to an antitrust suit filed by NorthBay Healthcare against Kaiser in the Northern District U.S. District Court in August 2017.

Within the past four years, Kaiser has racked up more than $2.8 million owed to Victor Valley. The amount continue to increase on a daily basis, the suit says.

Victor Valley seeks restitution, disgorgement, compensatory and punitive damages, interest, injunctive and declaratory relief, and legal costs.

The plaintiff is represented by David A. Robinson and Roxanne I. Kraft of Enterprise Counsel Group in Irvine, California.