Stanford Health Care Sues Hawaii Medical Service Association

On Monday, a case was filed in the Northern District of California by Stanford Health Care against the Hawaii Medical Service Association. The lawsuit concerns the contractual underpayment of claims filed by Stanford Health Care on behalf of insureds of the Hawaii Medical Association.

Insurance plans frequently contract for discounts from total billed charges on medical claims in exchange for higher volumes of patients directed to the contracting health center. These contract frequently permit subsidiaries and affiliated insurance plans to access the contract without having to negotiate a new contract.

Stanford Health Center is contracted with Anthem Blue Cross of California and Hawaii Medical Service Association is an affiliate with access to this contract. Instead of paying the medical claims per the contractual provisions in the contract, the Hawaii Medical Service Association paid the claims at a lower “usual and customary rate” which was lower than both the full billed charges and the Anthem contract.

Stanford is suing for breach of contract and quantum meruit. Stanford is represented by Stephenson Acquisto & Colman, Inc.