Kaiser Permanente tentatively settled a suit brought by small physicians in the Inland Empire Sept. 12.
Physicians for Healthy Hospitals alleged Kaiser intentionally underserved its healthcare clients in the county so their care would instead be performed by PHH’s hospitals, and that Kaiser would stiff PHH when billed for the care of more than 3,190 of Kaiser’s insured. Kaiser paid PHH $7.5 million out of a billed $21 million, according to court documents.
Kaiser denied the claims in a general denial. Some bills were not paid at a reduced rate due to a glitch in Kaiser’s payment software, said Marcus Hoffman, Kaiser Foundation Health Plan Southern California Chief Financial Officer, in a deposition.
“Kaiser does not maintain sufficient hospitals in Riverside to service the needs of all Kaiser’s member population. PHH is informed and believes, and thereon alleges, this is intentional.”
Physicians for Healthy Hospitals, in the complaint
A court document said Kaiser’s payments to PHH reflected what Kaiser believed was the reasonable value of PHH’s services.
The details of the settlement, reached the day jury selection began, have not been released. A settlement does not admit guilt.
Neither Kaiser nor Physicians for Healthy Hospitals have responded to our request for comment.
PHH operates the 327-bed Hemet Valley Medical Center and the 84-bed Menifee Valley Medical Center.
They filed their suit Nov. 21, 2018. Their second amended complaint sought damages for breach of implied contract, reasonable payment, restitution and violation of the health and safety code.
The complaint claims Kaiser intentionally underserves their Riverside County hospitals, so that emergency care patients will instead seek care at PHH’s Hemet and Menifee centers. PHH is legally required to provide care for people in danger of loss of life or serious injury or illness.
“Kaiser does not maintain sufficient hospitals in Riverside to service the needs of all Kaiser’s member population. PHH is informed and believes, and thereon alleges, this is intentional,” the complaint says.
PHH claimed Kaiser would ignore bills sent to them for more than 1,000 of Kaiser’s insured clients.
“In numerous instances, (Kaiser) paid less or nothing at all,” the complaint says.
“Kaiser implemented this secret strategy, scheme and pattern knowing and intending to underpay PHH and to shift the burden of providing emergency healthcare to its members, and to the public in general, away from Kaiser and to PHH and similarly situated providers,” the complaint claims.
PHH claimed Kaiser refused to pay for services provided to a man treated at the Hemet Valley Medical Center after a suicide attempt, and for a man treated at the Menifee Valley Medical System for pneumonia, even though Kaiser approved each client’s stay.
In 2006, 2008 and 2010, the California Department of Managed Healthcare investigated Kaiser and found they did not pay for out-of-network emergency services provided to its members, the complaint says.
Case information
David Robinson, Anjuli Woods and Brian Hoops of Irvine’s Enterprise Counsel Group, ALC, represented PHH.
Moe Kesharzi, Matthew McCurdy, Marc Feldman and John Brooks of Los Angeles’ Sheppard, Mullin, Richter & Hampton LLP represented Kaiser Foundation Hospitals and Kaiser Foundation Health Plan.
Riverside Superior Judge Raquel Marquez presided.
Case No. MCC1801347.
Read the complaint here.
