Blue Cross Demand for Reimbursement of Medi-Cal Payments to Non-Contracted Hospitals
We want to alert you to a recent development regarding what we believe to be inappropriate refund requests from Blue Cross to a number of non-contracted hospitals for Medi-Cal services rendered in 2007 and 2008. A number of hospitals have received letters from Blue Cross this month alleging that the plan supposedly overpaid for services during this time period and requesting reimbursement. The alleged source of the overpayment were funds that Blue Cross paid in or after November 2008, retroactively, for services rendered by the hospital during the prior two years. The letter states that Blue Cross only made these payments based on explicit directions from the California Department of Health Care Services ("DHCS"), and that Blue Cross now considers those directions based on a flawed interpretation of the Rogers Amendment. The letter also demands that any contest to this reimbursement request be made by the hospital within 30 working days of receipt of the letter.
For multiple reasons, our view is that these are not properly characterized as overpayments, that Blue Cross is not entitled to demand repayment of these funds or to offset them, that the hospitals who received this notice should object to the request, that Blue Cross' refund request is non-compliant with applicable regulations, and that hospitals are entitled to retain this money. Any hospital who was not contracted with Blue Cross for Medi-Cal services for any period between 2007 and 2008 should check to see whether it received such a letter from Blue Cross, and if so, carefully consider its legal rights before accepting Blue Cross' demand for repayment.
If you would like our legal assistance on this matter, please feel free to contact Glenn Solomon, Daron Tooch, or Lloyd Bookman in Los Angeles at 310-551-8111; or Craig Cannizzo in San Francisco at 415-875-8500. We currently are advising a number of hospitals regarding their legal rights on the issue. We also are representing the California Hospital Association in ongoing litigation against DHCS related to other issues raised by the Rogers Amendment.
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