WMH settles overpayment dispute with health plan
By Laura Collins
Published in News on July 23, 2010 1:46 PM
Wayne Memorial Hospital agreed to settle a dispute with the state Health Plan by paying $140,000 back to the insurance plan.
Wayne was one of 33 hospitals across the state auditors said owed money to the State Health Plan. The auditors reviewed hospital reimbursements from July 2003 through June 2008 and found several hospitals had received too much money from the insurance plan in reimbursements.
The State Health Plan released an interim report in November, and the state Attorney General's office sent a letter to Wayne Memorial soon after requesting refunds of the overpayment in the amount of $1,035,245.
The interim audit report found that the insurance company overpaid reimbursements for outpatient services in most cases because fee schedule changes were made at hospitals without the insurance company being notified.
Many of the contracts with the State Health Plan limit reimbursement increases and require the plan be notified of fee schedule changes. The audit verified whether each hospital reported rate changes to the insurance company.
Since the original interim report was issued, Health Plan officials continued the audit and recalculated the amount owed from the hospitals based on a three-year statute of limitations. This reduced the amount the audit said Wayne Memorial Hospital owed to $353,734.
The final audit report, released this week, said the State Health Plan agreed to a settlement agreement with Wayne Memorial Hospital for $140,000.
But hospital president and CEO William Paugh said although Wayne Memorial paid the settlement amount, that the hospital is not agreeing it owed the money in the first place.
"We agreed to settle the state's claim not because we feel that any payment is justified, but because it makes the most sense for us in terms of ongoing legal expenses," Paugh said this week.
"We believe the hospital's rates in these years were fairly set, known to the state, and reasonable for State Health Plan participants. The resolution that we reached is in the best interests of our long relationship with the state, and our continued efforts to provide excellent care to its plan participants."