Judge orders insurance companies to pay Lifespan $30M as reimbursement after judgment

Providence, R.I.-based nonprofit health system Lifespan is expected to receive $30 million from a judgment requiring two insurance companies to reimburse Lifespan for a judgment the system paid after it cut ties with New England Medical Center in Boston, now Tufts Medical Center, according to an Associated Press report.

In 2002, New  England Medical Center and Lifespan decided to end their affiliation agreement, which resulted in both parties taking legal action against one another. Massachusetts Attorney General Martha Coakley also filed a lawsuit against Lifespan on behalf of New England Medical Center related to its public charity status, according to the report.

A trial, which occurred years later, resulted in New England Medical Center and Ms.Coakley's office receiving $29.6 million, while Lifespan received $20.4 million. Lifespan satisfied the judgment by paying the difference- about $9.2 million- to New England Medical Center but sought reimbursement for the entire $29.6 million judgment, according to the report.

Lifespan filed a lawsuit against RLI Insurance Co. and National Union Fire Insurance Co. of Pittsburg seeking reimbursement for the judgment, as the system had a $15 million policy with National Union and a $10 million policy with RLI when the lawsuit was filed. Both insurance companies had argued Lifespan wasn't entitled to reimbursement.

However, this week, U.S. District Judge John McConnell ordered National Union and RLI to pay out their policies to Lifespan, "as well as costs, interest and attorneys' fees," according to the report.

Lifespan spokeswoman Gail Carvelli told the Associated Press this week it was premature to talk about the judge's decision without seeing all of the language in the ruling, according to the report.

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