Dive Brief:
-
NorthBay Healthcare in Fairfield, Calif., is suing Kaiser Permanente (KP), charging that its Kaiser Foundation Health Plan denied or underpaid for emergency care provided at two NorthBay facilities — NorthBay Medical Center in Fairfield and NorthBay VacaValley Hospital in Vacaville, reported Becker’s Hospital Review.
-
According to the lawsuit, NorthBay alleges KP conducted an “anti-competitive conspiracy” and tried to “starve NorthBay” of revenue in hopes of monopolizing healthcare and insurance in Solano County," which is located between the Bay Area and Sacramento in Northern California.
-
KP told The Reporter that it disagrees with NorthBay’s claims and said it offers “a fair and reasonable rate for emergency services provided to members by non-Kaiser hospitals.” KP said NorthBay also sued the integrated healthcare system for higher payments in 2009.
Dive Insight:
NorthBay said it had an agreement with KP “that provided a contractually agreed upon discount on emergency and hospital services” until September 2016. Under the contract, NorthBay said KP underpaid for services by more than $1.5 million.
KP terminated the contract and since “has failed to reimburse NorthBay for more than $21.7 million for emergency services that NorthBay was required to provide to Kaiser members,” according to the lawsuit.
This is not the first time KP has been accused of anti-competitive actions. Prime Healthcare in Ontario, Calif., sued KP in 2008 alleging unfair competition and breach of contract lawsuits. For its part, KP accused Prime of "patient trapping” and charging KP members inflated out-of-networks rates. The two sides ultimately agreed on new rates for KP members who are treated at a Prime hospital.
Based in Oakland, Calif., KP is one of the largest nonprofit integrated healthcare systems in the U.S. It serves 11.8 million members, including more than 4.1 million members in Northern California alone. KP has 43% of the health insurance market share in California and operates 39 hospitals, including two Solano County hospitals with EDs in Vacaville and Vallejo.
This isn't the only current issue involving payers and hospital emergency departments (ED). Anthem has recently been expanding its practice of not paying for ED visits it deems unnecessary. Insurance companies are trying to steer patients toward lower-cost settings like retail clinics.
NorthBay estimates its facilities will treat more than 900 KP members this year and asked that it receive "equitable" compensation for treating KP enrollees. NorthBay also alleges KP steered ED patients to its facilities “not on health conditions, but on Kaiser’s financial incentives.”
In its suit, NorthBay seeks damages for alleged antitrust law violations; more than $21.7 million to compensate losses, a new equitable agreement between the two companies and litigation costs.