Upstart hospital chain Prime Healthcare Services has filed eight lawsuits in California courts against Kaiser Permanente, arguing that Kaiser has wrongly refused to pay more than $25 million in emergency services claims. While Prime doesn't have a contract with Kaiser, it alleges that there's an implied contract under state and federal laws, notably the Emergency Medical Treatment and Active Labor Act. In the lawsuits, which are filed on behalf of various Prime hospitals, the company contends that Kaiser requires out-of-network hospitals to call its "Emergency Provider Response Program" line immediately if a Kaiser member comes into the emergency department. Prime contends that its duty under federal is to stabilize the patient before their health plan is contacted.
What the lawsuits don't discuss--but what may very well be fueling the conflict--is that it's Prime's strategy not to be a provider on any health plan's network. Prime owner Dr. Prem Reddy has upset health plans across the state by taking this position, which allows his hospitals to bill at higher rates than they would be getting otherwise. If Prime prevails in this case, it will give the hospital chain additional leverage in milking extra reimbursement from health plans, so there's a lot at stake here. At the same time, even providers that don't refuse to participate in health plans should probably stay on top of this one--as it could affect whether Kaiser will pay them for emergency services, too.
To learn more about the cases:
- read this Modern Healthcare piece (reg. req.)
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