By Christopher Snowbeck
Pittsburgh Post-Gazette (Pennsylvania)
Copyright 2006 P.G. Publishing Co.
The settlement of a class- action lawsuit against Highmark Inc. will bring $7 million to local ambulance companies and could give them a better shot at future business with the region’s dominant health insurer.
In a hearing yesterday morning, U.S. District Court Judge Gary L. Lancaster gave final approval to a settlement in which Highmark agreed to pay $10 million to settle claims that it underpaid for ambulance services provided to Medicare beneficiaries enrolled in its SecurityBlue health plans.
The ambulance companies in question provided services on a noncontract basis to Highmark members, and sought reimbursement from the insurance company for their full charges. Highmark, however, offered substantially lower payments in accordance with Medicare-approved rates.
The plaintiffs claimed the underpayments for services provided between January 1997 and April 2002 amounted to roughly $15.7 million.
In agreeing to the settlement, Highmark did not admit to any wrongdoing.
Thirty percent of the settlement goes to attorneys who represented the nearly 300 ambulance companies in the class. Those companies will split the remaining $7 million, with the biggest winners being the Oakland-based Center for Emergency Medicine — which operates the STAT Medevac air ambulance service — and the City of Pittsburgh EMS. Each will receive more than $400,000.
“This results in a net financial benefit to the class members of 44 cents on the dollar from the settlement fund,” said Charlie Kelly, attorney for the plaintiffs.
As part of the settlement, Highmark agreed to offer contracts for emergency and non-emergency ambulance services to any company that meets standards for network credentials. Previously, most ambulance companies in the Pittsburgh region could perform non-emergency ambulance services for Highmark only as a subcontractor to an ambulance company that operates from Monroeville, but is based in New York.
“We now have access to a market that we did not have access to previously,” said Ed Heltman, president of Pennsylvania Medical Transport in Ellwood City and past president of the Pennsylvania Ambulance Association.
Mr. Heltman said reimbursements available previously were relatively low, adding: “Everybody has a better opportunity to at least cover their costs by dealing directly with Highmark.”
During 2005, Security Blue paid out about $6 million for non-emergency ambulance services.
The class action litigation began in 2003, one year after Highmark was sued on similar grounds by Non-Profit Emergency Services of Beaver County, which does business as Medic Rescue. The parties settled that case as well.