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Life Health > Health Insurance

Medical claim reviewer sues failed N.Y. CO-OP

By Allison Bell

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A Minnesota claim review company is suing Health Republic Insurance of New York Corp. over $4.77 million in unpaid claim review bills.

The plaintiff, Nokomis Health Inc., says in a complaint filed Thursday with the U.S. District Court for the Southern District of New York that Health Republic of New York owes it the payments for Nokomis efforts that reduced Health Republic claim payments by $26 million.

See also: CMS hopes for cash from failed CO-OPs’ vendors

Organizers of Health Republic of New York founded it with financing from the Consumer Operated and Oriented Plan (CO-OP) program. Drafters of the Patient Protection and Affordable Care Act of 2010 (PPACA) created the CO-OP program in an effort to increase the level of competition in the private health insurance market.

The New York Department of Financial Services, the New York Department of Health PPACA public exchange and the Centers for Medicare & Medicaid Services (CMS) announced Sept. 25 that they were putting Health Republic in an orderly shutdown process.

Federal bankruptcy proceedings and some types of state resolution proceedings may shield a troubled company against claims filed outside of the main resolution process.

The New York state chapter of the National Association of Insurance and Financial Advisors (NAIFA) told members in January that, at that point, regulators had not petitioned the court for an orderly liquidation proceeding.

A representative for the state financial services department declined to comment on the current state of Health Republic of New York proceedings.

Ronald Chillemi, a lawyer who is representing Nokomis, said in a statement that the company was forced to initiate litigation because of the payment delay. “We look forward to a speedy and successful resolution of this matter,” Chillemi said.

In another, separate legal proceeding, Alexander v. Freelancers Health Service Corp. d/b/a Health Republic Insurance of New York et al., a former Health Republic employee filed a sexual harassment complaint against Health Republic with the U.S. District Court for the Southern District of New York in April 2015. Health Republic and individual plaintiffs denied the plaintiff’s allegations.

A court-arranged mediator held a session on the matter Sept. 15. The court received a notice on Sept. 23 that the parties had reached a settlement in principle on the case. The court dismissed the case with prejudice Oct. 5.

Representatives for the plaintiff and the defendants in the harassment case were not immediately available to comment on the case. 

See also:

UnitedHealth Says N.Y. PPACA risk-adjustment program could be in trouble

N.Y. broker group studying CO-OP failure effects

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