Dive Brief:
- Prime Healthcare and Kaiser Foundation Health Plan will take their courtroom disputes to binding, confidential arbitration, ending the unfair competition and breach of contract lawsuits that the two companies have been fighting since 2008, according to a Kaiser press release.
- Moreover, the companies also agreed on rates that Kaiser plan members will be charged when being treated at a Prime hospital. In the past, Kaiser has accused Prime of "patient trapping," or admitting Kaiser patients and then charging them inflated out-of-network rates.
- But it's not all smiles between the two companies, with Kaiser stating in the release, "Contrary to erroneous media reports and erroneous statements by Prime, Kaiser Permanente has not agreed to support Prime's acquisition of the Daughters of Charity hospitals and has not sent a letter of support to the Attorney General."
Dive Insight:
With its sharp addendum to their otherwise flat press statement, Kaiser reminded us that Pasadena—while close to Disneyland—is not the happiest place on Earth for the healthcare industry.
In that landscape, lawsuits become very expensive, as well as extremely public. Neither company seems interested in opening their books, emails and other supporting documents in order to defend itself against multiple pieces of cross-litigation. Arbitration is less expensive, faster and confidential, all pluses for both companies. On the downside, arbitration is also binding and final, meaning that the arbitrator's decisions cannot be appealed, but that's a price they seem willing to pay.