BY: MAX NESTERAK
ROCHESTER, Minn. (Minnesota Reformer) – A worker at Mayo Clinic’s Arizona hospital filed a proposed class action lawsuit against the health system and insurer Medica in federal court Tuesday, alleging they were saddled with enormous health care bills after their claims were “systemically underpaid.”
The legal filing echoes some of the complaints the Reformer first reported last fall from Mayo Clinic workers, who said their poor health insurance forced them to see expensive out-of-network providers for essential care.
Mayo Clinic employees said they racked up more than $10,000 in health care costs a year while others said they avoided going to the doctor for fear of what it would cost, all while working for one of the world’s most prestigious health care organizations.
The worker, who is unnamed in the lawsuit, is seeking reimbursement for the money they allege they overpaid for care that should have been reimbursed — as well as for the thousands of other Mayo Clinic employees and Medica customers they believe are similarly situated and paid more than they should have for care.
The lawsuit alleges Medica, which administers Mayo Clinic’s self-insured plan, uses “deceptive, misleading, arbitrary” pricing methods that leave plan members in the dark about health costs and allow for inconsistent reimbursement rates, in violation of federal law and Medica’s fiduciary responsibilities.
One significant problem for Mayo workers is Medica’s provider portal, which is supposed to direct workers to in-network doctors and other health care professionals. According to the lawsuit, Medica provided false and misleading information about providers in its member portal.
The plaintiff, who is represented by the McCune Law Group, found zero in-network providers when using the Medica portal, leading them to believe they could have care covered for out-of-network health care. Even though the providers were licensed and accredited professionals, Mayo and Medica only covered a fraction of the bill.
Medica also lacks transparency in its explanation of benefits, so members don’t have enough information to understand or appeal Medica’s coverage determinations. Even when asked for their pricing methods, Medica and Mayo refused to provide the relevant information, according to the lawsuit.
A spokesperson for Medica said the company doesn’t comment on pending litigation. Mayo did not immediately respond to requests for comment.
Mayo’s facilities are in-network for all employees, and those who are near one of the major campuses in Minnesota, Florida or Arizona told the Reformer last year they receive great care — when they’re able to get appointments.
But Mayo also employs many remote workers who must find providers that are part of a third-party network to receive the most affordable care. Workers described what experts call a “phantom network”: the insurer claims to have dozens or even hundreds of in-network doctors and other providers, but they aren’t taking new patients, no longer accept the insurance or have retired.
While nurses, software developers, researchers and thousands of other Mayo Clinic workers may struggle to find affordable care, Mayo doctors and executives are given an annual allowance of up to $10,000 a year to cover the difference between out-of-network and in-network coinsurance costs as well as dental and orthodontic expenses.
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