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Hospitals Sue Managed Care Company

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Hospitals in New York are accusing units of a large health insurer of giving patients incorrect information about the hospitals’ network status.

Jamaica Hospital Medical Center and Flushing Hospital Medical Center, units of MediSys Health Network Inc., New York, have filed a suit against UnitedHealth Group Inc., Minnetonka, Minn., and a number of UnitedHealth officers and affiliates, including Oxford Health Plans (NY) Inc., in the U.S. District Court in New York.

The plaintiffs in the suit, Jamaica Hospital Medical Center Inc. et al. vs. United Health Group Inc. et al., allege that UnitedHealth and other defendants violated the federal Racketeer Influenced and Corrupt Organizations Act and other federal laws by trying to force the Jamaica and Flushing hospitals to stay in UnitedHealth subsidiaries’ provider networks, telling patients that the hospitals were out of network at times when the hospitals were in network, and processing in-network claims as out-of-network claims.

The plaintiffs also have accused the defendants of backdating a contract to try to force Jamaica Hospital to stay in the Oxford network, and of trying to force Jamaica Hospital and Flushing Hospital to press the hospitals’ anesthesiologists to join UnitedHealth subsidiaries’ provider networks.

The plaintiffs filed a suit based on similar allegations in state court in 2006, and they are involved in arbitration proceedings with UnitedHealth.

UnitedHealth believes arbitration is the appropriate forum for resolving the dispute with the hospitals, company spokesman Tyler Mason says.

“None of the issues alleged in Jamaica’s lawsuit, which we believe is without merit, affects the current status of our contract,” Mason says. “Our members are accessing and will continue to access Jamaica on an in-network basis.”