Nine South Florida hospitals sue HMO for failure to pay $88 million in emergency services

Mar 31, 2016 12:30pm

By Annette M. Boyle

Nine hospitals in south Florida have sued Molina Healthcare for $88 million, saying it didn't fully reimburse them for emergency services provided to its members.

The hospitals, all owned by HCA Holdings, include Kendall Regional Medical Center in Miami, Aventura Hospital and Medical Center and Mercy Hospital in Miami.

The suit alleges that more than 3,000 Molina members received emergency treatment at the hospitals in 2014 and 2015 and that "Molina unilaterally decided to underpay the hospitals for these claims at only a fraction of the billed charges, according to the court filing.

The hospitals billed the plan $104 million for emergency services. Molina paid them $13.6 million, according to the suit.

Under Florida law, hospitals must provide emergency care to residents, regardless of insurance coverage. And insurers must reimburse providers when their members get emergency care. If there's no contract, the law says insurers must reimburse hospitals the lesser of the provider's charges, the usual and customary charges for similar services in the community or a mutually agreed-upon rate, according to the filing.

The rates paid by Molina for the period in dispute were less than the negotiated discount rates the plan pays to in-network providers in exchange for steering larger patient volumes to the facilities, the hospitals allege.

The plaintiffs claim that "Molina attempted to have its proverbial cake and eat it, too, by reimbursing the hospitals at deeply (and unilaterally determined) discounted amounts without extending any of the corresponding benefits that a provider would ordinarily receive in exchange," such as being a participating provider in the plan's network or receiving additional patient volume.

Molina, one of the country's largest managed care companies, reported a net income in 2015, nearly double 2014 levels. The hospitals all became participating members of the Molina health insurance exchange plan on October 1, 2015--after the period in question--and agreed to accept discounted rates of reimbursement for members who sought treatment at their facilities after that date, noted the claim.