- Associated Press - Monday, April 20, 2015

DOVER, Del. (AP) - The foundation that owns the Alfred I. du Pont Hospital for Children in Wilmington filed a federal lawsuit against United Healthcare of Delaware on Monday over pediatric care provided to children covered by Medicaid and another state-subsidized health care program.

In its lawsuit, the Nemours Foundation is seeking more than $15 million in damages from United Healthcare for breach of contract and unjust enrichment.

The lawsuit stems from United Healthcare’s termination last year of an agreement with Nemours under which UHC members received in-network coverage at the du Pont Hospital and other Nemours pediatric facilities.

Despite termination of the in-network agreement, Nemours says it has an obligation and responsibility under the agreement, as well as state law, to continue to treat United’s members under certain conditions and for certain periods of time.

But Nemours claims that the Medicaid rate it has been receiving from United for those services is not adequate, and that it has not been paid in full for providing medically necessary services, including emergency care, to United members, including those on Medicaid and Delaware Healthy Children Program.

“Instead, United has wrongly taken advantage of its position as a provider of health insurance for Delaware’s underprivileged children to enrich itself at the expense of Nemours, a longstanding provider of and advocate for medical services for all of Delaware’s children,” the lawsuit claims.

In a statement, United suggested that Nemours resorted to litigation after making a failed money grab.

“Nemours has repeatedly asked to be paid up to 50 percent more than other comparable children’s hospitals in the region for providing the same inpatient services, which would significantly raise costs for the Delaware Medicaid program and the taxpayers who help fund Medicaid,” United Healthcare spokeswoman Alice Ferreira said in the statement. “Nemours is now using litigation to respond to our refusal of their excessively high rates, but our focus remains on ensuring the Medicaid members we serve have continued access to the specialized care they need through the many other care providers who have committed to improving patient quality and outcomes.”

But Nemours claims that United has failed to maintain a complete network of pediatric primary care physicians and pediatric specialists who are available to its Medicaid and DHCP members within 60 miles of their homes, as required by United’s contract with the state Department of Health and Social Services.

Nemours also claims that United has been slow to identify in-network physicians to which Nemours should refer United members.

DHSS spokeswoman Jill Fredel said agency officials had not seen the lawsuit and would need time to review it before commenting.

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