Employee Plan Says Kaiser Issued Checks Without Getting Claims
SAN FRANCISCO (CN) – Two health plans for Northern California electrical workers claim Kaiser is overcharging them and then sending reimbursement checks to members who did not submit claims for reimbursement to justify the extra charges, in a lawsuit filed in the Northern District of California.
Sacramento Area Electrical Workers Health And Welfare Trust, Solano-Napa Counties Electrical Workers Health And Welfare Trust, and their respective trustees sued Kaiser Foundation Health Plan for breach of contract and breach of fiduciary duty.
The plans say they established a “pay to provider” program with Kaiser that would let Kaiser charge all services to an automated clearinghouse account instead of directly billing the plans’ employees.
However, the plan included a reimbursement program that allowed Kaiser to directly reimburse employees if they were billed for charges the plans had to pay and submitted a timely claim for reimbursement to Kaiser. In March, the plans claim they learned that Kaiser was sending employees reimbursement checks charged to the plans’ account though the employees had not submitted claims for reimbursement.
Worse yet, Kaiser refuses to send documents proving that the payments were reflective of services provided to the employees or that the charges were consistent with the plans’ parameters, according to the complaint.
Though the trustees have asked Kaiser several times to stop sending these checks without proof that they are necessary so the trustees can audit the payments, but Kaiser refuses to cooperate, preventing them from performing their fiduciary duties, the complaint states.
The trustees claim Kaiser is charging the plans’ account higher retail rates though it previously charged employees lower wholesale rates when they were billed directly. But the agreement with Kaiser did not mention that it would charge higher rates under the pay to provider program, aside from a monthly administrative charge of $3.75 per member, according to the complaint.
Kaiser’s payment of money from the plans’ account to employees who have not submitted reimbursement claims has caused the plans to lose at least $22,000, the complaint states.
The plans seek an injunction preventing Kaiser from issuing checks to employees unless the employee also submits a claim for reimbursement. They also ask the court to order Kaiser to provide information that will let them audit all payments to the program, and to charge the lower wholesale rates as specified in the parties’ agreement.
The plans are represented by Lois Chang with Neyhart, Anderson, Flynn & Grosboll.