A pediatrician in Sparks, NV, has filed a federal class action lawsuit against Hometown Health Plan and Renown Health, claiming the insurance provider bilked thousands of Northern Nevada doctors out of "tens of millions of dollars" by failing to pay claims, forcing them into "one-sided" contracts and manipulating payment codes.
The suit is seeking class-action status in federal court because Hometown Health's alleged unfair practices likely affected thousands of physicians and physician groups to varying degrees.
Hometown Health Plan Inc. is the largest state-certified and federally qualified health maintenance organization in the region. Renown Health is the parent company of Hometown, and serves a 17-county region with a population topping 750,000, the lawsuit said.
Physicians who enter into contract agreements with Hometown are considered participating physicians or preferred providers and have access to the company's long list of patients. The physicians are obliged to service those patients, and must work in accordance with the terms of their contract.
But starting in December 2002 to the present, Hometown Health "engaged in a pattern of improper and deceptive conduct and business practices by carrying out a scheme to deny, impede, delay, and reduce lawful reimbursement" to physicians who treated enrollees in the company's managed-care plans, the suit said.
Hometown used a list of methods to refuse payment, the suit said.
In some cases, if a physician provided several unrelated medical services to a patient in a single visit, the company would combine, or "bundle," the services into one payment that was far less than it was obligated to pay, the suit said.
The company also "improperly" used software programs to automatically change codes on procedures, bundle services, ignore modifiers or deny payment without clinical review or oversight, the suit said. It also reimbursed doctors for some vaccines at rates lower than the actual cost of the drugs, the suit said.
The suit said doctors were not paid within the time periods set out in their contracts, and could not acquire an adequate explanation when the Hometown Health refused to pay what was due, the suit said.
Besides seeking compensatory and punitive damages, the lawsuit asks the court for injunctive relief, "prohibiting, restraining and enjoining" the company from engaging in a list of practices that are keeping doctors from receiving payment and fair services.