Bankrupt hospital owner accuses Texas tribe of violating federal labor law

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Victory Parent Company in The Woodlands, Texas, has sued the Kickapoo Traditional Tribe of Texas, alleging the tribe engaged in fraud and violated the Employee Retirement Income Security Act, according to the Southeast Texas Record

VPC, which previously owned six hospitals in Texas, alleges administrators of the tribe's self-insured group health plan conspired to defraud VPC by refusing to pay $2.1 million in medical benefits for services provided to a member of the health plan.

According to the complaint, a member of the self-insured plan underwent lumbar anterior and posterior procedures that required two weeks of inpatient care. Before services were provided, VPC claims it verified the patient's insurance and pre-certification of the medical necessity of the procedures, according to the report.

VPC submitted the claim for payment, but the plan rejected the claim saying the procedures were not medically necessary. Two years later, after VPC appealed the decision, the claim was again denied due to exclusions in the plan. However, VPC claims the exclusions did not exist at the time of the procedures and that administrators have refused to provide copies of plan, according to the report.  

"Even if the purported exclusionary language did, in fact, exist at the time of the precertification, the defendants were obligated to affirmatively disclose said exclusionary language to the plaintiffs at that time," the complaint states.

VPC filed for bankruptcy in June 2015, according to the report.

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