Kaiser seeks TRO blocking Queen’s hospital from billing patients

KAILUA-KONA — Kaiser Health Foundation is asking a federal judge to block The Queen’s Health Systems from directly billing its members until the court renders a decision on Kaiser’s allegations of unfair billing practices.

The foundation, the insurance arm of Kaiser Permanente, filed a motion for temporary restraining order and preliminary injunction on Thursday in U.S. District Court in Honolulu.

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The move comes more than two months after Kaiser filed suit in federal court to bar Queen’s from directly billing its members, with the exception of deductibles and co-pays, and to permit Kaiser to pay the “reasonable value” of emergency services provided by Queen’s.

The June 12 complaint followed a breakdown in negotiations after a contract between the two expired May 30.

With the court filing Thursday, Kaiser seeks to maintain the “status quo” for billing, and to enjoin Queen’s “from seeking any payments for emergency services directly from Kaiser members beyond their deductibles and copayments.”

“Unfortunately, QHS continues to threaten to bill patients for the balance of any charges, above what Kaiser Permanente pays. This practice, known as balance billing, is intolerable and puts patients, who may already be dealing with serious and stressful health issues, in the middle of a contract dispute,” Laura Lott, Kaiser spokeswoman, said in a statement provided Friday.

Kaiser argues Hawaii law prohibits “balance billing” because Queen’s and Kaiser are bound by an expressed or implied contract as participating providers under Hawaii’s Health Maintenance Organization Act. Such billing would also cause irreparable harm to patients covered by Kaiser and Kaiser itself.

“If QHS believes it is entitled to a higher rate of reimbursement than what Kaiser pays, it should direct any collection activity at Kaiser, not patients. Not only is this the legally-correct course of action, it is the efficient and equitable one,” the motion’s memorandum in support reads. “A dispute over reasonable reimbursement is best handled between two large companies in a single suit, not in hundreds or thousands of David versus Goliath collection actions against Hawaii residents.”

U.S. District Court Judge Derrick K. Watson set a Sept. 9 hearing to consider the motion. He will also take up that day an Aug. 13 motion filed by Queen’s to dismiss the case.

Queen’s argument for dismissal points to numerous legal deficiencies in Kaiser’s lawsuit and seeks the court to dismiss the claims with prejudice, or permanently.

“The recent legal filing by Kaiser is a reaction to Queen’s request that the Court dismiss the frivolous lawsuit filed by Kaiser. In the filing, Kaiser’s claims it has the unilateral right to determine how much it has to pay Queen’s and that Queen’s has no recourse but to accept whatever Kaiser decides to pay. Kaiser has not yet indicated — to the Court or to Queen’s — how much it plans to pay for Queen’s services,” a statement provided Friday attributed to Queen’s CFO Mich Riccioni said. “That is completely unacceptable and is the reason Kaiser’s members face the prospect of receiving bills from Queen’s. Make no mistake, if Queen’s is forced to bill Kaiser’s members directly for unpaid balances, it will be a direct result of Kaiser’s refusal to meet its obligation to pay for services provided by Queen’s.”

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The dispute stems from the expiration of a hospital services agreement that had been in place for five years between The Queen’s Medical Center and Kaiser Permanente on May 30. As a result, The Queen’s Health Systems hospitals, including North Hawaii Community Hospital and Molokai General Hospital, are no longer considered participating providers within Kaiser’s network.

“Queen’s hoped to resolve this dispute with Kaiser through negotiation. Through its actions Kaiser has made it clear there was never a mutual intent to negotiate in good faith. Kaiser’s decision to negotiate through litigation and press releases is causing unnecessary stress for its members and is further damaging what used to be a good working relationship. It is unfortunate that Kaiser has elected to act in this manner,” Riccioni said.

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