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NY hospital accuses insurance company of failure to reimburse

A New York hospital has accused an insurance plan that covers over 10,000 teachers of failing to follow an agreement put together in 1997. The agreement between the hospital and insurance company addresses the billing processes. It is specific and provides an equation stating the insurance company will pay 92 percent of outpatient costs for those covered by the plan.

What is the dispute? The hospital states the insurance company has failed to abide by the terms of the agreement and owes the hospital millions in unreimbursed fees.

The issue is complicated by the fact the hospital claims the insurance company continues to misapply the formula. As a result, it is sending a new notification to the insurance company every month in an attempt to accurately reflect the amount owed.

What happens next? Whether a private practice seeking payment from insurance companies or a large hospital system, resolution of these types of legal disputes take time. This lawsuit has already been multiple years in the making, and is now entering discovery.

At this point, both parties gather evidence to support their claims. It will likely entail a case by case review of thousands of claims to see if the insurance company correctly applied the formula for payment. Negotiations could result and lead to a settlement, or the case could move forward to litigation. Either way, this phase is anticipated to take a year or more. If successful, the hospital could recoup reimbursement payments and better ensure the insurance company makes accurate payments in the future.

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