| The skinny
Tensions between providers and payers are increasingly spilling into the courtroom, with health systems and provider groups turning to the legal system for relief from what they say are unfair payment rules and policy overreach. Here are three recent examples of healthcare providers suing insurers over alleged underpayment. California Hospital Association sues Anthem
The California Hospital Association filed a lawsuit on Monday against Anthem, challenging the payer’s “network penalty policy.” Under the policy, Anthem decreases its payments to hospitals by 10% when patients are treated by out-of-network physicians, even if the hospital itself is in-network, which effectively penalizes hospitals for not agreeing to the payer’s terms, the complaint said. The association contends that these payment reductions go beyond normal out-of-network reimbursement rules and hurt hospitals’ ability to cover the cost of care. More broadly, the association argues the policy puts pressure on hospitals to accept lower in-network rates during contract negotiations. In a statement sent to MedCity News on Tuesday, Anthem stood by its policy. Broward Health sues Florida Blue
Fort Lauderdale-based Broward Health sued Florida Blue, alleging the payer has systemically underpaid for emergency services since the health system went out of network on July 1 after contract negotiations failed. The complaint, filed April 7, claims Florida Blue reimbursed emergency department claims at rates below both billed charges and what Broward considers “usual and customary,” rather than the fair, market-based reimbursement levels required under state and federal law. Jefferson Health sues Aetna
Philadelphia-based Jefferson Health filed a complaint on April 6 against Aetna, claiming the payer is unfairly reducing payments for some hospital stays under Medicare Advantage. The lawsuit centers on Aetna’s “level of severity inpatient payment policy” for Medicare Advantage beneficiaries, which took effect on January 1. Under this policy, some hospital stays that are technically approved as inpatient are paid at a lower “observation-level” rate if Aetna decides the patient wasn’t sick enough. This mainly applies to hospital stays lasting between one and four midnights, even when a physician has admitted the patient as an inpatient. Jefferson argues that this policy “downcodes” legitimate inpatient care, therefore reducing hospital revenue and creating additional administrative burdens for providers to deal with as they appeal the lower payments. The health system also said that Aetna unilaterally created a new payment tier that was never negotiated as a part of their shared Medicare Advantage contract. “Aetna’s policies, including the Level of Severity Inpatient Payment Policy, comply with all applicable federal law and regulations and with the terms of our provider contracts. Aetna disagrees with the allegations in the lawsuit and will respond in the appropriate forum,” an Aetna spokesperson said in a statement.
— By Katie Adams |
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