Los Angeles-based Martin Luther King Hospital has filed suit against Blue Cross and Blue Shield of Georgia, alleging the insurer sends reimbursement money for emergency room services directly to patients as a means of retaliation against out-of-network hospital prices.
The hospital said these practices are in direct defiance of customary industry practices, where an insurer sends reimbursement directly to the hospital, according to Courthouse New Service.
MLK said many patients who receive checks from Blue Cross for out-of-network emergency services are "unaccustomed to receiving payments in such large amounts," according to the complaint. The hospital has found many patients instead use the money for personal expenses and are unable to pay their medical bills.
To date, MLK said it has identified more than $350,000 in payments BCBSG sent to patients rather than the hospital, according to the lawsuit. The hospital alleges BCBSG has adopted this practice as a way to strong-arm out-of-network hospitals into signing contracts with unsatisfactory reimbursement terms, according to the report.