Law Office of Henry B. LaTorraca Civil Trial Attorney

Kaiser under fire for contract dispute with 13 area hospitals

A business litigation suit in California has pitted 13 Southern California hospitals against the Kaiser Foundation Health Plan. The hospitals are claiming that the plan has failed to remit more than $150 million in payments for emergency services provided to patients who are policyholders. In many cases, Kaiser has also reportedly demanded that patients be transferred to their own facilities, often endangering the health of their own customers. State and federal laws dictate that hospitals must give emergency care to anyone who needs help.

A contractual dispute is going on between KFHP and the hospitals because the plan has not compensated the hospitals for the services that were rendered. Further compensation should also be paid because some of the patients receive Medicare. Further, a lawsuit in the case shows that KFHP is legally barred from ignoring physicians' orders for certain types of care, and the plan must pay for the care provided at the other hospital.

However, KFHP has apparently flouted those rules for 10 years, with Kaiser apparently failing to pay its neighboring hospitals for legitimate emergency services provided to KFHP patients. Further, those sometimes critically injured patients have been forced into "repatriation" -- that is, the patients and their treating physicians have been intimidated into transferring to a Kaiser facility, even if a move could endanger the victim's health. Finally, KFHP is accused of engaging in a variety of fraudulent activity in order to avoid paying legitimate claims from the other hospitals.

In this case, a contract dispute is causing discord between the two hospitals, but state and federal law is also apparently being violated by the Kaiser group. Businesses have a responsibility to honor their legal obligations to pay for specific services. In this case, the 13 other hospitals could be entitled to millions in compensation based on the alleged actions of the KFHP administrators.

Source: Courthouse News Service, "SoCal Hospitals Sue Kaiser for $140 Million" No author given, May. 22, 2014

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