Massena, health plan settle suit Town to get $1.6M over claims of low reimbursement to hospital

A lawsuit that dates back several years between the town of Massena and the St. Lawrence-Lewis Counties School Employees Medical Plan regarding payments to the former Massena Memorial Hospital, has been settled, with the town receiving $1.6 million.

The Massena Town Board accepted the settlement agreement during its Jan. 18 meeting.

Officials from both entities released the following statement:

"The town of Massena and the St. Lawrence-Lewis Counties School Employees Medical Plan are pleased to have reached a mutually satisfactory resolution to the lawsuits alleging that Massena Memorial Hospital was underpaid by the plan for services provided to persons covered by the plan between 2011 and 2018. This settlement allows the plan and town to continue providing services to the people of the north country without consuming additional public resources."

Deputy Town Supervisor Patrick M. Facteau said the resolution to the lawsuit was the result of mediation between the two parties.

Mr. Facteau had previously served as chief financial officer and interim CEO at the hospital while the lawsuit was in progress, and prior to the hospital's sale to St. Lawrence Health.

The case boiled down to the amount paid to the hospital for services. According to a contract with the Board of Cooperative Educational Services, the hospital was supposed to receive 92% reimbursement for all costs for outpatient services performed by the hospital on individuals covered by the plan. But hospital officials alleged that the payment had fallen short. Mr. Facteau said during a June 2019 meeting of the hospital's board of managers that, rather than receiving 92%, the hospital was getting "closer to 62%."

The ongoing legal battle between the hospital and the insurance plan, which was previously run out of the St. Lawrence-Lewis BOCES office, began in August 2017. The hospital claimed at the time the insurance plan had not paid almost $3.7 million for services under the 1997 agreement between the hospital and the insurance plan.

Excellus Blue Cross/Blue Shield now oversees health insurance administration for the St. Lawrence-Lewis Counties School District Employees Medical Plan. That function has been handled by staff at St. Lawrence-Lewis BOCES working in administrative offices for more than 30 years.

Thirteen districts and the St. Lawrence-Lewis BOCES participate in the health insurance consortium.