Mayo Clinic has sued the health plan division of Sanford Health, saying misrepresentations by the South Dakota-based insurer have stuck the medical center in Rochester with more than $700,000 in unpaid medical bills for a patient treated more than two years ago.
The payment dispute centers on intensive care and other services provided to an unidentified patient during a 2022 hospital stay that stretched from Feb. 5 to March 29.
Sanford preauthorized the patient’s care and provided some payment but later told the clinic that a different health insurer — a Medicaid health plan operated by Blue Cross Blue Shield of North Dakota — had primary responsibility, according to a lawsuit that was moved to the U.S. District Court of Minnesota in December.
Mayo says it refunded the payments to Sanford, but Blue Cross Blue Shield subsequently denied the payment claims due to a lack of preauthorization. The clinic says it is not seeking payment from the patient, a move that comes as Mayo has expanded financial assistance programs for patients lacking insurance coverage for needed care.
“For the reasons outlined in the lawsuit, Mayo Clinic is pursuing payment from Sanford Health Plan, which presented itself to Mayo Clinic as the patient’s primary insurance plan and approved all medical care at Mayo Clinic,” the clinic wrote in a statement. “It was only after the episode of care that Sanford Health Plan made the claim to Mayo Clinic that a different health plan was primary. Sanford’s misrepresentation prevented Mayo from obtaining reimbursement from the other health insurance plan.”
Sanford Health Plan said in a statement that it does not comment on active or pending litigation.
In a court filing last month, the insurer alleged Mayo failed to follow procedures with Medicaid claims, which caused Blue Cross Blue Shield of North Dakota to deny Mayo’s request for reimbursement. Sanford Health Plan, which said it represented a tribal health plan that was the patient’s payer of last resort, said Mayo was “looking to shift blame for its mistakes” by bringing the lawsuit.
“Sanford is not responsible for ... medical expenses just because Mayo failed to follow standard Medicaid procedure,” the insurer wrote in a memo supporting its motion to dismiss the case. “BCBS ND denied Mayo’s claim because Mayo attempted to fax a Notice of Admission to BCBS ND but sent it to the wrong fax number. BCBS ND also denied reimbursement because Mayo failed to communicate with BCBS ND about its claims until Aug. 5, 2022, and otherwise failed to follow Medicaid’s claims submission rules, by which Mayo has agreed to abide.”