Providence hospitals in California have joined other hospitals across the state in suing Kaiser Foundation Health Plan Inc., saying they are owed millions of dollars for emergency treatment of Kaiser’s members, according to several reports. The hospital group said Kaiser paid them too little and sometimes not at all for out-of-network emergency room care and post-stabilization treatment.
The complaint is filed in the Los Angeles County Superior Court.
Kaiser responded by saying Providence is seeking payments above fair and reasonable levels. When a price agreement isn’t in place, the company said it bases payment on typical payments made to others in the community. In a court motion filed earlier this year in Los Angeles Superior Court, Kaiser said plaintiffs would yield "truly enormous profits" if the prices they sought for services provided to Kaiser members were actually paid.
The lawsuit seeks compensatory damages, statutory interest, restitution and injunctive relief to stop practices that could lead to further underpaid claims.
In a statement, Kaiser said it calculates reasonable payments using its own financial statements on file with the state and that its methodology targets payment at more than the average of what a hospital receives from most plans. It said it has used the approach for more than 20 years and that it meets California’s requirements for determining a reasonable amount to pay.
Kaiser further contends that disputes should be handled not in court but through a federal resolution program established by the 2021 No Surprises Act. Hospital emergency rooms are required to treat anyone who seeks treatment, regardless of their ability to pay, and hospitals can seek reimbursement for insured patients. Under the No Surprises Act, the patient is charged the same amount as they would have paid to an in-network provider.
Kaiser and Providence do not have a written contract in place that establishes discounted rates for services, as many hospitals and insurance companies do. In the absence of such a contract, Kaiser is required to pay reasonable and customary rates, but the companies do not agree on what that rate should be.
According to the Orange County Register, Providence is seeking payment on 12,528 individual claims, including trauma cases. Kaiser said lumping together these claims, which represent 10 hospitals in diverse geographic areas with different economic factors, would be confusing for a jury. A judge overruled that argument earlier this month, allowing the case to move forward.
At least seven other health systems have sued Kaiser over similar allegations, including MemorialCare, Pomona Valley Hospital and Physicians for Healthy Hospitals. The Providence hospitals involved in this lawsuit are in Los Angeles, Orange, Humboldt, and Sonoma counties.
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