A California hospital says the Hawaii Medical Service Association, Hawaii’s largest health insurer, stiffed it on nearly $2 million in health care it provided to eight patients between 2016 and 2020 and is suing the insurer in Hawaii District Court in an attempt to recoup the costs.
Stanford Health Care, which has a main campus in Palo Alto, says it provided $2.3 million in care to patients covered by HMSA health plans, but the insurer reimbursed it only $335,674, or 14% of the costs.
The highest bill was incurred by a patient identified as K.L. who racked up $1.1 million in charges during a one-month hospital stay in 2016. HMSA covered $21,118 of those costs, according to the lawsuit.
Stanford Health Care says the cost of caring for another patient, identified as C.G., totaled $221,567 during a one-day stay in 2017, but HMSA covered only $5,513.
The lawsuit doesn’t specify what the patients were treated for, but says the costs reflect medical services, supplies, equipment and, in some cases, emergency care.
HMSA and Stanford Health Care declined to comment on the lawsuit, and it’s not clear whether the hospital attempted to bill the patients for any of the uncovered costs.
Hawaii residents covered by HMSA can face increased financial risks when seeking treatment outside of the state where there is a more restrictive provider network. Health insurance plans typically limit the out-of-pocket costs a customer can pay in any given year, but there are exceptions to what is included in the out-of-pocket cap. In some cases, particularly with more restrictive HMO plans, out-of-network costs are not included in the annual cap, which can leave patients with large medical bills.
The lawsuit was originally filed in California in 2021, but HMSA sought to have it tossed on jurisdictional grounds and a judge subsequently determined that California courts indeed lack jurisdiction. Stanford Health Care then moved the case to Hawaii District Court this month.
The hospital says it had a contractual relationship with HMSA because of the insurer’s affiliation with Blue Cross Blue Shield and its participation in the BlueCard program, which gives HMSA enrollees access to providers in other states. It also claims that HMSA “not only confirmed coverage, but also the treatment was deemed authorized.”
The hospital alleges that HMSA should have paid it either $686,608, in accordance with Blue Cross rates, or nearly $2 million, depending on what a court determines was the contractual arrangement.
HMSA has yet to file an answer to the complaint, but in a motion filed earlier this year seeking to have the case dismissed, the insurer argued that it didn’t have a contractual relationship with Stanford Health Care.
“HMSA is not a signatory or party to that Stanford- Anthem contract,” attorneys for HMSA wrote, referring to Anthem Blue Cross of California. HMSA also argues that too much time has passed to bring claims for the costs of two of the patients who received care in 2016 and 2017.
