A federal court has dismissed a lawsuit filed by Kaiser Foundation Health Plan Inc. against The Queen’s Health Systems over unfair billing practices.

The U.S. District Court quashed the case Kaiser filed to stop Queen’s from directly billing its members, with the exception of deductibles and copayments, after a contract expired May 30 and the parties were unable to come to terms on a new agreement.

Kaiser — both a medical provider and health plan — said it would only pay the “reasonable value of Queen’s emergency serv­ices” but “not necessarily 100%” of billed charges.” Queen’s provides emergency services for hundreds of Kaiser members each year at a cost of several million dollars, according to the health plan.

Queen’s said it would collect the balance of charges not paid by health insurance from Kaiser members.

“While the Court finds that this case should be dismissed with prejudice, it is perhaps self-evident that there are no real winners,” said Judge Derrick Watson in dismissing the suit. “Should QMC choose to balance bill Kaiser’s members for emergency services, QMC is unlikely to receive glowing attention from interested observers. In terms of dollars and cents, eventually someone or some entity will need to pay (or be ordered to pay) for the services QMC has rendered to Kaiser’s members.”

Kaiser said it intends to appeal the court’s decision and will “take whatever steps are necessary” to protect members and the community.

“While we are disappointed by the court’s ruling, Kaiser Permanente remains committed to defending Hawaii residents from predatory billing practices,” said spokeswoman Laura Lott. “Above all we are committed to ensuring our members receive the care they need. Consumers deserve better and we welcome the opportunity to work more closely with the health care community and other stakeholders to find ways to deliver more affordable health care options to Hawaii residents.”

Kaiser said it has been working since late 2017 to renew a contract with the hospital.

“During that process, Queen’s hasn’t meaningfully compromised on their original demand for unreasonable rate increases,” Lott said. “Health care premiums are derived from health care costs. And unsustainable charges from providers like Queen’s are one of the primary drivers of the steadily rising health care costs in this state.”

Queen’s countered that negotiations failed because Kaiser has refused to accept responsibility to pay for the actual costs of care for members with complicated medical conditions.

The hospital said it is “always open to negotiating an acceptable contract.”

“While Kaiser has not met its obligations to pay Queen’s for services rendered to Kaiser members, Queen’s has not billed Kaiser members for more than the appropriate co-pay,” said Queen’s spokesman Cedric Yamanaka. “It is our expectation that Kaiser will recognize the value of protecting its members and consider the fair proposals Queen’s has presented.”

Hospital billing has come under fire in recent years because patients do not know the cost of care until after service is rendered. In some cases, patients have been billed exorbitant amounts, particularly if their health plans do not have contracts with the medical providers. In most cases, patients can apply for financial assistance with hospitals.