Sutter Hospital Files $6.6M Lawsuit Against Health Net Over Patient Care Payments
Raising the "ante" in an ongoing contract dispute that could affect 250,000 Northern Californian residents, Sutter Health has filed a lawsuit against Health Net, alleging that the insurer owes the hospital system's Summit Medical Center in Oakland more than $6 million for patient care, the Sacramento Business Journal reports. Unlike "most" of Sutter's other 26 hospitals, which receive reimbursements from Health Net based on a "master contract," Summit had its own contract with the health plan before it joined Sutter in December 1999. That contract expired on May 1, and Summit reached a verbal agreement with Health Net to continue to provide care for its members on the condition "that new [reimbursement] rates," which are still being negotiated, "would be retroactive to May 1." Now, however, Sutter's entire relationship with Health Net is in jeopardy, as the two have not been able to agree on a new contract. In the lawsuit, filed Aug. 30 in Sacramento Superior Court, Summit says that Health Net owes it $6.6 million plus interest for providing care to their members from May to September. That figure, according to court documents, is "based on a rough estimate of the difference between full hospital charges and the discounted rate Health Net was getting under the old contract," the Business Journal reports. The lawsuit states: "Summit's agreement to extend the termination date" of its contract with Health Net "was made with the reasonable expectation that negotiations would proceed diligently and that new rates would be promptly agreed upon." Nearly 250,000 Health Net members use Sutter hospitals (Robertson, Sacramento Business Journal, 9/21).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.