Rochester, Minn.-based Mayo Clinic has sued Sanford Health Plan, alleging that misrepresentations by the insurer left the health system with more than $739,000 in unpaid medical bills for a patient treated in early 2022, The Minnesota Star Tribune reported Jan. 2.
Six things to know:
1. The lawsuit centers on intensive care and other services provided to a patient during a hospitalization from Feb. 5 to March 29, 2022, according to court documents. Sanford preauthorized the care and initially made partial payments but later claimed another insurer — Blue Cross Blue Shield of North Dakota — was the primary payer.
2. Mayo said in court documents that it refunded Sanford's payments but was denied reimbursement by BCBSND due to lack of preauthorization. Mayo also said is not seeking payment from the patient.
3. Mayo alleges Sanford's misrepresentation of its role as the patient's primary payer prevented timely preauthorization and led to the unpaid claims. In a statement, Mayo accused the health plan of presenting itself as the primary insurer, preauthorizing all care, and paying several claims before later shifting responsibility to another plan.
"It was only after the episode of care that Sanford Health Plan made the claim to Mayo Clinic that a different health plan was primary," Mayo said in a statement. "Sanford's misrepresentation prevented Mayo from obtaining reimbursement from the other health insurance plan."
4. Sanford Health Plan, which said it represents the patient as a payer "of last resort," disputes the allegations, arguing Mayo failed to follow Medicaid claims procedures during the lengthy hospitalization, according to the report. Mayo's errors, including misdirected communications and delays, caused BCBSND to deny the claims, Sanford alleges.
"Sanford Health Plan does not comment on active or pending litigation to protect the confidentiality of those involved and out of respect for the legal process," a spokesperson for the organization said in a statement shared with Becker's. "Sanford Health Plan is committed to providing a high-quality experience to all our members."
5. The dispute, initially filed in state court and moved to federal court in December, will have a pre-trial conference on Feb. 4. Mayo seeks damages exceeding the unpaid bills, including litigation costs. A motion hearing on the lawsuit is scheduled for Feb. 11.
6. Sanford Health Plan has filed a motion to dismiss the lawsuit, arguing that Mayo's claims are insufficient and that BCBSND — as the responsible Medicaid payer — should be included in the case.