NorthBay Healthcare is suing Kaiser to receive payment for emergency care Kaiser members receive at NorthBay’s two hospitals in Solano County, and to stop what it is calling an “anticompetitive conspiracy.”
Attorneys Christopher Yates, David Adams and Claire Holton-Basaldua filed the lawsuit Tuesday on behalf of the NorthBay Healthcare Group and the NorthBay Healthcare Corporation in the U.S. District Court for the Northern District of California, San Francisco Division.
The suit alleges the Kaiser Foundation Health Plan, Kaiser Foundation Hospitals and the Permanente Medical Group, three separate legal entities, have “conspired to monopolize” the healthcare insurance and services markets in Solano County.
The filing was done in federal court because it is a claim of antitrust, which is a federal offense.
NorthBay has two hospitals in Solano County, each with emergency departments, in Fairfield and Vacaville. Kaiser also has two hospitals with emergency departments in Vacaville and Vallejo.
NorthBay has provided emergency services to Kaiser members since 1959 when NorthBay Medical Center in Fairfield opened. Since 2010, the number of Kaiser members treated by NorthBay’s two hospitals has steadily increased, according to NorthBay, which estimates it will treat more than 900 Kaiser members this year.
“Hospital emergency facilities in California must provide care for those in need, and Kaiser must compensate neighboring non-Kaiser hospitals that provide services to its health plan members,” NorthBay officials said in a prepared statement.
Kaiser Health Plan had an agreement with NorthBay that provided a contractually agreed upon discount on emergency and hospital services. Under that contract, the lawsuit alleges, Kaiser underpaid for services by more than $1.5 million.
Since Kaiser terminated the agreement in September 2016, Kaiser Health Plan has underpaid NorthBay more than $21.7 million for services provided to Kaiser enrollees, the lawsuit states.
In a prepared statement, B. Konard Jones, president and CEO of NorthBay Healthcare, said his nonprofit health system’s ability to provide advanced medicine and care for the most vulnerable is being harmed.
“As we are the safety net that catches and cares for all those who do not have insurance or cannot afford insurance — many of whom Kaiser does not accept — our ability to provide and grow emergency care and advanced services is greatly reduced by Kaiser’s failure to equitably reimburse us.”
Among other demands, NorthBay is seeking treble damages for Kaiser’s alleged violations of antitrust laws, damages to compensate for the $21.7 million in losses allegedly sustained as a result of Kaiser’s conduct and a new equitable agreement for future services between NorthBay and Kaiser. NorthBay also seeks repayment of reasonable litigation costs.
“NorthBay has provided care to many Kaiser members who have faced life-threatening emergencies,” Jones said. “We simply seek to be fairly compensated for providing those services. Everyone loses when competition is stifled by unlawful and mean-spirited business tactics.”
NorthBay wants to have a contract established with Kaiser, Steve Huddleston, vice president of public affairs, said, and were meditating for it, but mediation failed.
“In most cases, health plans have contracts with hospitals for emergency care,” Huddleston said, so that they know what rates they will pay up front.
When you are in a car crash, you will be taken to the nearest emergency department, he added. You don’t necessarily get to decide if you go to a hospital in your network.
Nor Jemjemian, Kaiser Permanente senior vice president and Napa Solano area manager, said Kaiser is committed to keeping health care affordable and to paying a “fair and reasonable rate for emergency services provided to members by non-Kaiser hospitals,” which he said is a customary practice in the industry and authorized by California law.
“We strongly disagree with the claims made by NorthBay Healthcare in its complaint and look forward to defending ourselves in court, as we did successfully in the past when NorthBay sued Kaiser Permanente for higher payments in 2009,” Jemjemian said in an email.
NorthBay’s lawsuit alleges Kaiser engaged in unfair business practices by making it “extremely difficult” for NorthBay to obtain payment for claims.
According to NorthBay, Kaiser regularly informed NorthBay that the hospital had not properly submitted the required records for a claim. NorthBay claims this is incorrect.
NorthBay also accuses Kaiser of delaying payment on large claims.
Kaiser’s alleged refusal to pay “impairs NorthBay’s ability to invest in its facilities and new technologies, improve its services and provide charity care to Solano County patients,” according to the lawsuit.
The lawsuit also alleges Kaiser’s practices endanger patients, taking issue with Kaiser’s Emergency Prospective Review Program, which is staffed by Permanente Medical Group physicians and reviews patient cases when a Kaiser members arrives at a NorthBay emergency room.
According to the suit, Kaiser Vacaville also requires ambulances to bring emergency patients to Kaiser facilities even when they are not stable and a NorthBay or other non-Kaiser facility is closer.
The lawsuit references a pedestrian versus car crash that occurred last year.
Kaiser allegedly directed the ambulance transporting the victim, a Kaiser member, to go to Kaiser Vacaville, and drove past NorthBay’s Fairfield hospital.
NorthBay also claims a Kaiser member was permanently disabled because he was not transferred to an available non-Kaiser hospital. He had received a non-invasive cardiology procedure at Kaiser Vacaville to attempt to remove a heart blockage, which was not successful.
“Rather than transferring the patient to NorthBay’s Fairfield facility, which is a designated STEMI receiving center with an excellent cardiovascular surgery program, and is approximately 13 miles south of Kaiser’s Vacaville facility; Kaiser Vacaville transferred the patient down to Kaiser Vallejo where the patient had to wait nine days for treatment,” the lawsuit states.
Jemjemian said quality and safety are top priorities at Kaiser, and care decisions are based on what is best for the patient’s medical needs, as determined by physicians and other clinical professionals.
NorthBay also accuses Kaiser of evading its obligation to patients who have financial difficulty in paying, instead of sending them to other hospitals such as NorthBay.
Underpaying NorthBay is “particularly pernicious given the role NorthBay plays in treating indigent Solano County residents,” the lawsuit states.
NorthBay said that in 2015 they provided more than $56.02 million in care to patients who could not afford it, whereas Kaiser provided $5.48 million.
At least 18 hospitals in California have sued Kaiser to try to recover reasonable fees for services provided to Kaiser Health Plan enrollees, NorthBay stated in the lawsuit.
NorthBay Healthcare is demanding a jury trial in this case.
Kaiser officials, however, maintained that NorthBay’s claims were inaccurate.
“The facts do not support NorthBay’s description of Kaiser Permanente’s community investments,” Jemjemian said. “In 2015, Kaiser Permanente made $2.1 billion in community benefit investments, including $897 million in Northern California and $90 million in the Napa Solano area. This includes providing charitable care and coverage for low-income individuals and underserved communities, reinforcing community-based health partnerships, supporting research, training health care workers and more.”
Date: Aug 29, 2017