Western Pa. Ambulance Firms Sue Insurers Over Tactics

Highmark and five other insurance companies deliberately send ambulance service reimbursements to their enrollees, instead of to the ambulance providers, in order to coerce the providers into signing contracts that offer the insurers discounts, a lawsuit claims.

A group representing more than 200 Pennsylvania ambulance companies and 11 individual ambulance services filed the federal racketeering lawsuit Friday in Pittsburgh.

Charles Kelly, the lawyer representing the Ambulance Association of Pennsylvania, Pittsburgh Emergency Medical Services and 10 other plaintiffs, said state law requires the insurers to pay ambulance companies directly, the same way they pay other medical service providers.

Instead, the insurers tell ambulance companies they'll pay them directly only if they sign the discount contracts, he said.

The circumstance has been an issue for years, but the recession pushed ambulance companies into taking legal action, Kelly said.

"I think everybody can see that health care providers are very worried about cash flow," he said. "Certainly reimbursement rates with Medicare and Medicaid aren't getting any better."

Highmark spokesman Mike Weinstein said the company hadn't seen the lawsuit and wouldn't comment about the ambulance companies' allegations.

Kelly said the ambulance companies are seeking class action status for the case and anticipate more than 200 individual companies joining the lawsuit. The companies that are plaintiffs include the city of Pittsburgh, Mon Valley Emergency Medical Services in Monessen, Robinson Emergency Medical Services and Valley Ambulance Authority in Moon.

The ambulance companies don't think they should have to give discounts in order to get payments directly from insurance companies, Kelly said.

"Sometimes, to make it clear who's right and who's wrong, you have to file a lawsuit," he said.

The health insurance system is "confusing enough when it works perfectly," and enrollees tend to believe the money is theirs when insurers send checks for hundreds or even thousands of dollars directly to them, Kelly said.

"Frequently, they don't turn around and send it to us. If they had, we wouldn't have a lawsuit," he said.