College of Law > Academics > Centers, Institutes & Initiatives > Mary and Michael Jaharis Health Law Institute > e-Pulse Blog > Molina HealthCare California Sued by Physician For Failing To Pay Medi-Cal Reimbursements

Molina HealthCare Sued By Physician For Failing To Pay Medi-Cal Reimbursements

Kaiser Health News reports that, On December 30, 2016, Manuel Figueroa, M.D., filed a class action suit on behalf of himself and all other similarly situated individuals against Molina Healthcare of California.  The suit was filed in the Superior Court of California County of Los Angeles, Central District. 

What is Molina HealthCare of California?

Molina HealthCare of California is a Southern California publicly traded insurer.  Molina “operates health plans in 12 states and Puerto Rico covering about 4.2 million people, including 683,000 in California.”  Molina’s members mainly consist of individuals who are enrolled in Medicaid or Medicare managed care plans. 

Reasons behind this lawsuit?

This class action suit arises from the allegation that Molina failed to properly reimburse its qualified medical professionals with “enhanced” reimbursements in accordance with Section 1202 of the Patient and Affordable Care Act (ACA).  Section 1202 of the ACA lists that during the months of service between January 1, 2013 through December 31, 2014 qualified medical providers are entitled to be reimbursed one hundred percent of Medicare allowable rate.  In order to be classified as a qualified medical provider, the “medical providers need to practice in a covered specialty or subspecialty—including family medicine, general internal medicine, or pediatric medicine, and subspecialties of those areas—and specify through a self-attestation process that they were either Board-Certified in the eligible specialty or subspecialty or that at least 60 percent of their Medicaid claim during the relevant years were for the E&M Services identified in the federal regulations.” 

In this case, there is no question of whether Dr. Figueroa was an eligible provider.  When Molina was contacted by Dr. Figueroa in April 2016, Molina issued a check to IPA for $16,336.08. The check was for the Enhanced Payment due to Dr. Figueroa and other IPA medical providers. However, the amount paid out by Molina was not enough to cover the amount owed to Dr. Figueroa and similarly situated providers. 

Molina argues that it has no deadline in when it must pay out these enhanced payments to qualified providers. Molina’s general counsel says it does not matter when the E&M Services were administered. In Molina’s eyes the company can delay payments for years since they do not have a set date for pay out. In addition, Molina does not think it needs to pay interest​ for the funds it withheld from California providers stating, “Molina still has not made required Enhanced Payments to California physicians, even though these payments are owed for services provided years ago, in 2013 and 2014.”

Why is this an important issue?

This is an important issue because insurers, like Molina, are currently being closely monitured as the health care market continues to be in distress. Physicians can not keep assuming the debt that is left when they are not properly reimbursed for treating patients with Medicare managed care or Medicaid. If insurers, like Molina, continue to take advantage of providers, providers will stop wanting to accept patients with certain health coverage —making access to health care harder for these individuals. 

Katelyn Docherty is currently a 2L at DePaul University College of Law. Katelyn completed her undergraduate degree at the University of the Pacific in California, where she majored in sociology. Katelyn has a special interest in health law and will complete her law degree and certificate in health law in 2018.