Kaiser Foundation Health Plan Inc. filed a federal lawsuit Wednesday against The Queen’s Health Systems, after the hospital provider said it intended to directly bill Kaiser members who receive emergency medical services at its facilities as of May 31.

In a letter dated June 3, Queen’s chief financial officer Mich Riccioni said Kaiser members would be responsible for any claim not reimbursed by the health plan at 100% of billed charges, which the health maintenance organization called “unfair billing practices” that its members are “not legally obligated to pay.”

Kaiser — both a medical provider and insurer covering more than 250,000 members in Hawaii — since late 2017 has not reached agreement to renew a contract for emergency services that expired with Queen’s on May 30. Kaiser said in a statement on its website that it was disappointed that Queen’s has “rejected multiple offers for a fair and reasonable contract and has not given any indication of compromise from their original demands.” As a result, Queen’s Health Systems hospitals are non-participating providers out of the Kaiser Permanente network.

“Without a contracted rate for our commercial members, (Queen’s) is threatening to bill patients for the balance of any charges, above what (Kaiser) pays,” said Kaiser spokeswoman Laura Lott. “This practice, known as balance billing, is intolerable and puts patients, who may already be dealing with serious and stressful health issues, in the middle of a contract dispute. Kaiser Permanente must act to protect our patients.”

Kaiser is asking the U.S. District Court to stop Queen’s from directly billing its members, with the exception of deductibles and co-payments, and to allow the HMO to pay only the “reasonable value of Queen’s emergency serv­ices,” which is “not necessarily 100%” of billed charges. The health plan said that Queen’s provides emergency services for hundreds of Kaiser members each year at a cost of several millions of dollars.

“While we remain committed to working toward a fair and equitable agreement, we cannot agree to QHS demands for unreasonable rate increases,” Lott added. “Such payments are unsustainable and would greatly increase medical inflation and escalate the overall cost of care for all Hawaii residents.”

Named in the complaint are The Queen’s Medical Center, the state’s only Level 1 trauma hospital; Queen’s Medical Center-West Oahu; North Hawaii Community Hospital; and Molokai General Hospital, run by parent company The Queen’s Health Systems.

“Queen’s is in the process of reviewing the lawsuit. While we do not comment on pending litigation, we can say that we will continue to ensure all patients who seek our help, regardless of insurance coverage, receive the highest quality of care,” said spokeswoman Minna Sugimoto. “It has been our mission for 160 years to provide great clinical care for all the people of Hawaii, and we will continue to serve all patients, including Kaiser members, any time they need our services.”

Commercial health plans negotiate payment rates with hospitals, according to the American Hospital Association, with larger insurers having more leverage to “demand bigger discounts.”

Kaiser said it is working to ensure that members referred to Queen’s facilities will continue to receive treatment. It said future referrals will be to contracted providers. Kaiser members with Medicare and Medi­caid, the government health insurance program for seniors and low-income residents, are not affected by the contract dispute.

For questions about coverage or benefits go to kp.org or call 432-5955 on Oahu or 800-966-5955 on the neighbor islands.