Kaiser Barely Pays for Medevac, Class Claims

by Barbara Wallace, Courthouse News, July 18, 2015 

HONOLULU (CN) - Kaiser barely covers emergency air transport, a class of patients claims in a lawsuit filed in the U.S. District Court for the District of Hawaii.

Lead plaintiff Toby Sidlo sued Kaiser Permanente Insurance Company and Kaiser Foundation Health Plan, on behalf of himself and all others similarly situated, for violations of the Employee Retirement Income Security Act.

Sidlo had Kaiser health insurance coverage through his employer, non-party Kauai Sea Tours, according to the lawsuit.

"On or about July 17, 2014, plaintiff was badly injured during an accident in which he suffered serious and potentially life-threatening burns over large portions of his body. At the time of his accident, plaintiff was located in Kauai, Hawaii. Unable to adequately treat plaintiff's serious burn injuries, a decision was made by treating health professionals to transport plaintiff to Oahu, Hawaii to be treated in a suitable burn center and trauma unit," the complaint states.

Non-party Hawaii Life Flight, Inc. flew Sidlo to non-party Staub Medical Center where he received skin grafts which left him with scars covering 30 percent of his body, according to the complaint.

Although Sidlo's Kaiser policy said it would cover 80 percent of the cost of medically necessary emergency transportation services, Kaiser denied most of it, leaving him with a $36,000 balance due, according to the complaint.

Sidlo contends Kaiser customarily underpays emergency transportation services.

"Defendants and their related entities have established and carried out a deliberate and systematic policy to deny all claims for proper emergency transport reimbursement, even though it knows that the terms of its own plan documents purport to provide full reimbursement coverage for the medical services minus a standard 20 percent co-pay applicable to the class," the complaint states.

Kaiser banks on seriously ill or financially strapped folks not being able to "physically or financially challenge the Kaiser under-reimbursement program," to save tens of millions of dollars, the complaint continues.

"The average cost of an emergency air medical flight is $40,000," the complaint states.

But Kaiser has under-reimbursed almost 100 such flights in Hawaii since 2013, reimbursing at rates of only 10 to 20 percent, according to the complaint.

Sidlo and the class seek declaratory and injunctive relief, costs, interest, attorney fees and equitable disgorgement. The class is represented by Michael A. Lilly and Valerie Kato of Ning, Lilly & Jones in Honolulu.

PDF: Text of Lawsuit