Virginia Gay Hospital, a critical access hospital in Vinton, Iowa, sued three private insurers managing Iowa's Medicaid program for allegedly recouping overpayments, according to court documents.
The hospital's petition, filed in September in the Iowa District Court of Benton County, named Amerigroup Iowa, UnitedHealthcare of the Midlands and AmeriHealth Caritas Iowa as defendants. VGH accused the managed care organizations of recouping overpayments related to emergency room reimbursements.
In an April 2017 bulletin, the Iowa Department of Human Services and Iowa Medicaid Enterprise recognized the ICD-10 code list used by MCOs to determine recoupments was "incomplete and inaccurate" and said it "does not include a number of codes that are used in the ER, particularly those related to behavioral health," according to VGH's petition.
VGH claims the MCOs violated their contracts and federal law by failing to follow and use the right ICD-10 codes. VGH said it lost thousands of dollars in patient revenue and accused the groups of not providing a functioning appeals process, calling the MCOs' process a "virtual sham."
In an answer to the petition, one MCO — AmeriHealth Caritas, which pulled out of Iowa's privatized Medicaid program in November 2017 — denied using an incomplete and inaccurate list of ICD-10 codes. AmeriHealth also denied recouping alleged overpayments from VGH.
The lawsuit "fails to state a claim for breach of contract with sufficient specificity regarding the relevant contract and its terms," the answer said. AmeriHealth added it "at all times acted in good faith, reasonably, for legitimate reasons, and in accordance with applicable laws."
Amerigroup's parent company, Anthem, told Becker's Hospital Review it does not comment on pending litigation.
Becker's Hospital Review also reached out to UnitedHealthcare of the Midlands.This article will be updated if more information becomes available.
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