Medical Center Sues Kaiser Foundation Health Plan For $4M
|By Kristen Consillio, The Honolulu Star-Advertiser|
|McClatchy-Tribune Information Services|
Queen's and Kaiser,
Queen's said that since March, Kaiser has been paying a discounted rate, typically 80 percent, for services provided to Kaiser members. Queen's is suing to force Kaiser to make up the difference between the discount and the full price. Queen's also is asking that Kaiser pay unspecified punitive damages. The lawsuit was filed in Honolulu Federal Court on
Kaiser Permanente Hawaii Vice President
"We value our long-standing relationship with the
In the lawsuit, Queen's said it agreed in 1996 to care for Kaiser members at discounted rates through the end of 2011. Kaiser failed to extend the agreement or negotiate a new contract with Queen's, according to the lawsuit. Without a new contract in place, Queen's claims Kaiser should pay the full price for services provided to Kaiser members, the lawsuit says.
Kaiser paid the full price in January and February but in March began reimbursing Queen's at a lower rate, the lawsuit says.
"Kaiser began to pay less than 100 percent of billed charges, typically paying only 80 percent or less," the complaint says. "These underpayments resulted in a significant shortfall in compensation."
Though Queen's would not disclose the number of Kaiser patients it has served since the contract expired, the hospital said it has never turned away a Kaiser patient seeking treatment.
Queen's said it notified Kaiser that it would no longer receive discounts on hospital services in the absence of a new contract, information Kaiser ignored, the lawsuit says.
Queen's is also suing
Stratose claims Kaiser is entitled to discounted pricing based on Stratose's relationship with a third party,
Queen's said in March it suddenly began receiving underpayments that had been "repriced" by Stratose, an entity previously unknown to the hospital, the lawsuit said.
In the suit, Queen's said it has repeatedly asked Kaiser to explain the discounts it is taking and demanded a copy of its agreement with Stratose.
Kaiser responded that the contract is "proprietary and confidential" and that attempts to obtain a the agreement "could be construed as attempting to interfere with Kaiser's contractual relations," the lawsuit says.
Queen's says in the suit that Kaiser and Stratose are attempting to "perpetrate a scheme that is known in the healthcare industry as a silent PPO arrangement," when an insurer, repricer or other entity attempts to "use a series of complex, often proprietary or confidential contracts to take improper discounts on medical services. (Their) ongoing efforts to conceal the details of their relationship constitute fraud," the lawsuit says.
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