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Verity Health System seeks approval of reimbursement claim settlement
By Caroline Salls
Pittsburgh, Nov. 22 – Verity Health System of California, Inc. and its St. Francis Medical Center (SFMC) and St. Vincent Medical Center (SVMC) debtors requested court approval of a settlement reached with Local Initiative Health Authority for Los Angeles County, which does business as L.A. Care Health Plan, according to a motion filed Thursday with the U.S. Bankruptcy Court for the Central District of California.
Verity said the settlement fully resolves disputes arising from at least 3,0000 claims for reimbursement submitted by the debtor hospitals to L.A. Care for medical services rendered to L.A. Care’s members between Oct. 1, 2016 and July 18, 2019.
The company said the compromise also preserves each party’s rights related to claims for reimbursement submitted for medical services rendered on and after July 19.
On April 1, 2019, L.A. Care filed a $2.37 million proof of claim against St. Vincent and a $7.7 million proof of claim against St. Francis, arguing that it has the right to recover pre-bankruptcy overpayments allegedly made to each of the debtor hospitals.
Under the settlement, LA. Care will pay $8 million to the debtor hospitals in full satisfaction of claims for reimbursement of services rendered before July 18.
In addition, the L.A. Care claim against St. Vincent will be reduced to $991,482, and the claim against St. Francis to $4.14 million. Those claims will be allowed as general unsecured claims in the debtors’ Chapter 11 cases.
A hearing is scheduled for Dec. 18.
Verity is a Los Angeles-based nonprofit health care system. The company filed bankruptcy on Aug. 31, 2018 under Chapter 11 case number 18-20151.
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