Humana Sues AllCare After Prior Settlement Falls Through

On Tuesday a case was filed in the Northern District of Texas. The case was filed by Humana Insurance Company and Health Value Management, Inc. against AllCare Physicians Group. The case was regarding a breach of a contract arising out of a settlement of a previous case regarding the overpayment of claims billed by AllCare to Humana in the regular course of their business.

Medical insurance companies process vast numbers of claims made by physicians and medical treatment facilities every year. When these claims are processed and paid by the insurance companies, the possibility exists that a claim will be processed incorrectly and overpaid according to the contract between the insurance company and the medical provider. This can be due to an improper calculation of the amount owed per the contract, a retroactive termination of the patient’s coverage, or other issue. When this occurs, the insurance company will seek to recoup part or all of a payment made to the medical provider.

Humana previously sought this repayment amount from AllCare and a settlement was reached between the entities where the amount would be repaid by AllCare according to a specific schedule over the course of 2020 through 2023. AllCare abided by this schedule, but failed to make payments beginning in April, 2021, and has not made the further scheduled payments. The contract also permitted acceleration of the payment schedule to make the full balance due immediately if there was a missed payment.

The plaintiffs are suing for breach of contract seeking full payment of the remaining balance and attorneys fees. They are represented by the firms of Falkenberg Ives and Porter Rogers Dahlman & Gordon.