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Medical Mutual says class-action suit lacks merit


ELYRIA — Medical Mutual of Ohio said a lawsuit that accused the insurer of charging hidden service fees is without merit.

Lorain County and the cities of Lorain and Elyria joined a class-action lawsuit against Medical Mutual of Ohio that accuses the insurance company of charging hidden service fees to fund a Cleveland Clinic incentive program. The suit was filed Tuesday in the Lorain County Court of Common Pleas.

“The lawsuit is absolutely without merit for multiple reasons,” said Kathy Golovan, Medical Mutual of Ohio chief health officer.

Golovan said the fees, which are actually claims, were never hidden. Group officials received a letter from Medical Mutual outlining new payment methodologies in the fall of 2012 which explained the charges in question.

The suit, which alleges that fees were buried and unseen, accused Medical Mutual of putting money toward the Cleveland Clinic’s Quality Alliance program without the consent of those being charged. The suit alleges that the various counties and cities were never told of the arrangement, and the charges were passed on to those entities, who were unwittingly left footing the bill for the incentive program.

However, Golovan said the charges in question are not at all hidden, were explained to groups and are impossible to miss on a bill.

“The fees, far from being hidden, are actually line items on the bills to the groups, very clearly stating what they’re for,” Golovan said. “They aren’t buried in hundreds of line items of other services.”

The fees in question regard payments for value-based contracts, Golovan said, which are an encouraged and widely accepted reimbursement method endorsed by Gov. John Kasich and aimed at reducing total cost of care.

For example, she said, Medicare and Medicaid uses the exact same reimbursement methods, as do other insurers. Medical Mutual of Ohio is not the only insurer which lists such charges on bills, she said.

Golovan read an excerpt from the letter sent to groups in 2012 that said value-based payments are made in the form of claims, and network providers are compensated for improved administrative and clinical processes as well as improved health and clinical outcomes.

“These are claims costs and no different than claims costs for a specific service,” Golovan said. “And we are not the only payer that does this.”

However, the suit claims certain fees on bills were never authorized. Eric Zagrans, an attorney who is representing Lorain County, Elyria and Lorain, said previously that it is believed more than 500 other entities across the state, including Lorain County, Elyria and Lorain, were charged unexplained fees that were used to pay for the Cleveland Clinic incentive program.

Zagrans said the Cleveland Clinic, which is not a party in the lawsuit, entered into a program called Quality Alliance several years ago in an effort to improve quality of care given by clinic-affiliated doctors who aren’t employed by the hospital, and that program was unwittingly funded by the entities.

Golovan said the suit’s focus on the Cleveland Clinic and the Quality Alliance program is misguided, because Medical Mutual of Ohio does not have a special relationship with the Cleveland Clinic. A misunderstanding of what the charges are is one of the fundamental problems with the lawsuit, she said.

“They (the Cleveland Clinic) are a provider in our network, just like many other providers are,” she said. “We have value-based agreements with dozens and dozens of providers out there.”

Contact Jon Wysochanski at 329-7123 or Follow him on Twitter @JonWysochanski.

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