SSM Health sued Bright Health Group for allegedly failing to pay claims for care provided at its Oklahoma facilities. The complaint could forecast similar attempts by more health systems to recoup reimbursement from financially struggling startup insurance companies.
Ari Gottlieb, a principal at consultancy A2 Strategy Group, pointed to the potential for unpaid claims in other states where Bright Health operated.
“I think there are going to be more lawsuits like this,” Gottlieb said. “It is a big deal.”
The Oklahoma division of St. Louis-based SSM Health filed the complaint April 10 against Bright Health, which allegedly owes SSM nearly $13.1 million for services provided to the insurance company's members between Jan. 1, 2020 and Feb. 7, 2023. Bright Health left the Oklahoma market, along with several other states, at the end of 2022 as it racked up losses and faced regulatory scrutiny.
Bright Health offered Oklahoma residents coverage through the Affordable Care Act's health insurance exchange marketplace and did not have a written contract with SSM to obtain a discount from the health system, the suit filed in an Oklahoma federal court alleges. As a result, Bright Health must pay the “reasonable and customary charges billed by SSM” related to nearly 2,500 claims, the health system alleges.
SSM declined to comment. Bright Health did not immediately respond to an interview request.
This appears to be the first time a health system has sued Bright Health in federal court over unpaid claims, according to a Modern Healthcare analysis of court records.
Like Bright Health's former exchange operations in 14 other states, the company ended coverage for its roughly 14,000 Oklahoma members at the start of the year. Company executives said on an earnings call last month they are working with state regulators to pay outstanding claims owed to providers. The Oklahoma Insurance Department declined to comment.
Bright Health also did not pay a state-mandated $2.1 million risk adjustment for 2021, the complaint alleges.
“The fact they allegedly did not make that is staggering,” Gottlieb said.
If true, Bright Health’s financial condition is even worse than expected, he said.
Bright Health reported a $12.9 million shortfall among its state-regulated subsidiaries at the end of last year. Several states have placed Bright Health under supervision requiring approval to spend funds, including on claims over a certain threshold.
The insurance company faces legal troubles in other jurisdictions too.
The company and its executives were sued in a Minnesota state court this month by the founders of Zipnosis, a telehealth provider Bright acquired for an undisclosed sum in 2021. Ben Bowman and Jon Pearce allege Bright Health executives defrauded them by concealing business information ahead of its initial public offering, leading Bowman and Pearce to agree to accept the startup's stock in exchange for ownership of the telehealth provider.
Bright Health also faces two lawsuits from shareholders in Delaware and New York alleging the company misled investors about its operations ahead of its public debut.