Suit Claims FL Insurance Companies Delay Medicaid Payments for Personal Gain

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Ten skilled nursing facilities (SNF) in Florida have banded together to file a proposed class action lawsuit against seven insurance companies over their alleged failure to pay interest on overdue Medicaid payments. The lawsuit names as defendants the following companies:

-Humana Medical Plan, Inc.

-American Eldercare, Inc.

-United Healthcare of Florida, Inc.

-Coventry Healthcare of Florida, Inc.

-Molina Healthcare of Florida, Inc.

-Sunshine State Health Plan, Inc.

-Amerigroup Florida, Inc.

According to the 21-page complaint, the plaintiffs provide Medicaid services to “some of Florida’s most vulnerable citizens” and receive payment from the defendants for covered services outlined in their Managed Care Contracts. Medicaid providers like the plaintiffs are required to submit coded claim forms to insurance companies for each service provided that detail the diagnoses and procedures performed, the suit says. Unless the defendants pay the claims within the specified timeframe, as required by law, they accrue 12% interest each year, according to the complaint. The plaintiffs argue that the defendants have failed to pay interest on overdue claims and have thereby hindered the plaintiffs’ ability to provide healthcare services to Florida residents.

According to the lawsuit, private insurance companies like the defendants compete for Managed Care Contracts, which grant them state and federal Medicaid funding. They are reportedly permitted to invest the money they receive from Medicaid and keep the profits, which the case argues incentivizes them to hold onto the funds for as long as possible to maximize their gain. The case alleges that as a result, the defendants have “fabricated” reasons to delay claims payments by “implementing procedures that automatically pend claims in a state of suspense and calculated understaffing” and then refusing to pay interest on the late payments.

“While awaiting payment, however,” the complaint notes, “SNFs like [the plaintiffs] continue to provide healthcare to Medicaid recipients and incur the costs necessary to do so.”

“According to the FHCA [Florida Health Care Association],” the complaint continues, “SNFs are regularly carrying over $200,000 in outstanding claims per center with $86,000 over 90 days past due, resulting in a statewide shortfall of $135 million.”