HMOs do not have to pay hundreds of thousands of dollars in back claims to more than 400 doctors who participated in Sinai Care, which is going out of business, Steven B. Larsen, Maryland insurance commissioner, ruled yesterday.
Sinai Care, an intermediary between HMOs and doctors, received monthly per-member payments from the HMOs through March or April but ran out of money and did not pay the doctors for some of the care they had delivered. It is Sinai Care, not the HMOs, that is responsible for those back claims, Larsen said.
But, Sinai Care does not have the money to pay the claims, said Jeff A. Nelson, its chief executive officer. "There is some money, but not lots of money," he said.
Nelson said he was not sure how much will be available after Sinai Care sells its assets and collects any debts.
While an exact total was not available for the disputed claims, Jeffery W. Valentine, director of corporate communications for CareFirst BlueCross BlueShield, said claims for his company involved several hundred thousand dollars. About 6,800 of Sinai Care's 13,000 patients were members of CareFirst's FreeState Health Plan.
Valentine said Sinai Care had not paid about six weeks' worth of claims. Dr. Louis Miller, a Pikesville internist who was Sinai Care's medical director, said Sinai Care typically had about $800,000 worth of claims a month. At that rate, six weeks of claims would be $1.2 million.
Nelson said Sinai Care's parent, LifeBridge Health - the system that operates Sinai Hospital and Northwest Hospital Center - cannot pay the claims because it would violate rules that prevent hospitals from paying physicians for referrals, thus jeopardizing LifeBridge's tax-exempt status."We would like to pay, but we cannot," said Jill Bloom, director of corporate communications for LifeBridge."I think LifeBridge has a moral obligation to pay for the inefficiency of its subsidiary," said Dr. Mitchell Klapper, a Pikesville dermatologist who said Sinai Care had not paid his February, March or April claims.
Larsen and Nelson said that nearly all Sinai Care doctors had paid a fee and become "members" of Sinai Care, a nonstock, nonprofit corporation.
Under state incorporation laws, Larsen ruled, this made them equivalent to stockholders - and HMOs do not have to pay back claims to stockholders. "The law makes a clear distinction" between stockholders and doctors who are "external contractors," Larsen said.
A few doctors might be able to have claims paid by HMOs, Larsen said, because they didn't pay a membership fee or because there is no record of their membership.
The HMOs had previously agreed to pay all doctors and to pay back claims for outside contractors, larsen said. He said he issued an order for them to pay, "just to cover all bases, but it is not an indication that there was recalcitrance."
Sinai Care was formed in 1985 by Sinai Hospital and hundreds of doctors to serve as a vehicle for contracting with HMOs. Sinai Care received monthly payments from HMOs and then paid the doctors fees for treatment.
Sinai Care's 13,000 patients can continue to see the same doctors - who will now submit claims directly to the HMOs - and cannot be billed for the disputed claims.
"Things seem to have worked out well for the members," said Jill Griffiths, a spokeswoman for Aetna U.S. Healthcare, which owns Prudential HealthCare. A few thousand Prudential members were treated by Sinai Care. Another 2,100 were members of HMOs run by Mid Atlantic Medical Services Inc.
Miller estimated that many doctors would be owed between $3,000 and $10,000 each. Amounts owed to each doctor will depend on the number of patients they treated and type of care they delivered.