On Thursday a case was removed to the Eastern District of New York from Queens County Supreme Court. The original case was filed by East Coast Plastic Surgery PC and Dr. Norman Maurice Rowe against Oxford Health Insurance and its subsidiaries; the case is regarding the discount Oxford made from the billed charges for the services provided by East Coast Plastic Surgery for an insured member of the Oxford Health plan.
Insurance companies contract with providers with the goal of receiving a discount from full billed charges in exchange for an increased number of patients directed to that provider. However, an uncontracted provider can still provide services for a member of the plan, as per individual agreements made with the insured provider, or through a rate known as the “out of network” rate.
The plaintiffs state that Oxford offered to compensate the services at an in-network rate of 80% of billed charges prior to the services, which would have resulted in a payment of $240,000. Instead, Oxford paid in the amount of $6873.85 as a percentage of Medicare rates offered for this service, a payment of slightly over 2% of billed charges and not the 80% offered in the previous letter.
The explanation of reimbursement offered no explanation of the alternative calculation of payment, no reference to the previous payment offer, and offered an amount that per the plaintiffs is drastically under the rates offered comparatively in the region and profession. The plaintiffs also notes that the balance of the bill has now become the responsibility of the patient, which the plaintiffs allege is a breach of the fiduciary duty of Oxford toward its insureds.
The plaintiffs are suing for breach of express agreement, unjust enrichment, quantum meruit, breach of fiduciary duty, and violation of the New York prompt pay law. They are represented by Lewin & Baglio, LLP. The defendants are represented by Robinson & Cole.
