$8.8M Arbitration Won Against Humana Medical

Miami Daily Business Review
December 3, 2002
By:  Julie Kay

In a case that could send a warning to health insurers, Nashville-based Hospital Corporation of America has won an $8.8 million arbitration decision against Humana Medical Plan Inc., of Florida for late payment or nonpayment on 3,300 patient accounts at 16 hospitals in Florida.

Ed Pozzuoli, a partner at Tripp Scott in Fort Lauderdale who represented HCA, said this was one of the first lawsuits filed by a hospital company against an insurer on the issue of nonpayment and delayed payment. “HCA was willing to go the distance in order to collect what it thought was owed in the contract,” he said. “Previously, the balance of power was with the [health insurers]. It wasn't in the culture of hospitals to sue.”

The ruling caps a three-year dispute between the parties. In 1999, HCA initiated the arbitration, the stipulated process for disputes under the terms of its contract with Humana. The hospital company alleged that Humana paid hospital bills for patients in Humana's HMO, preferred provider, Medicaid, and Medicare health plans as much as one year late. HCA hospitals sometimes had to bill Humana three or four times in order to receive reimbursement, Pozzuoli said. The contracts in question were between 1996 and 1999.

On Oct. 29, the arbitration panel ruled in favor of HCA, requiring Humana to pay the hospital company $8.84 million, plus $95,213 in costs. Humana was required to pay the award within 30 days.