Waveny Care Center ‘Has Suffered and Will Continue To Suffer Significant Harm’: Nursing Home Sues Healthcare Plan Provider


A Wilton-based company that specializes in healthcare plans and third-party administration services has violated its contract with Waveny Care Center by failing and refusing to provide documentation related to claims and payments made on behalf of the Farm Road facility’s employees, according to a lawsuit filed in state Superior Court in Stamford.

According to a complaint filed on behalf of Waveny Care Center by attorneys Patrick Begos and Trevor Bradley of Stamford-based Robinson+Cole, the third-party company— Employee Benefits Solutions LLC or ‘EBS’—has failed and refused to to provide records demonstrating that claims had been processed appropriately, that approved claims had been paid in full, that service providers were paid using network reimbursement rates, among other areas.

Those are areas of concern, according to the suit—first filed in July and scheduled for the court’s short calendar next week—in part because “Waveny has received numerous complaints and communications from employees, and/or employees’ healthcare providers, that providers did not receive payment for claims that EBS was contractually obligated to process and pay, and/or that EBS represented it had paid,” according to the complaint.

“Some of these complaints countered claims that EBS had represented it had paid years ago. In some cases, healthcare providers have referred employees’ past-due balances to debt collectors and/or attorneys for collection.”

An attorney representing the defendant, Richard P. Colbert of Stamford’s Day Pitney LLP, could not immediately be reached for comment, though he has filed opposition materials on behalf of EBS (see below). The president of EBS is a New Canaan woman, according to Connecticut Secretary of the State records.

According to the complaint, Waveny Care Center and EBS entered into a contract in December 2012, under which the Wilton company would provide services such as: establish claims procedures and processes for Waveny’s employee benefit plan; determine the eligibility of plan participants, verify claims submitted by claimants or their healthcare providers and determine benefits due, if any; manage the checking account(s) established in the name of the Waveny Plan, prepare checks for payment of approved claims and forward checks to Waveny, the employee or an eligible health care provider; provide monthly reports to Waveny; report approved service providers’ monthly invoicing and reconciliations; and provide payment of invoiced premiums from approved service providers.

Under the parties’ contract, Waveny agreed to fund the payment of claims by making deposits to checking accounts that EBS established to administer the payment process for claims, typically exceeding $100,000 per month.

“As required under the Administration Contract, EBS procured stop loss insurance provided by companies with whom EBS had established relationships, and EBS was designated Agent of Record for those stop loss policies,” the lawsuit said. “EBS received payments from stop loss insurers to reimburse Waveny for the cost of benefits, totaling in excess of $1.4 million.”

The complaint claims that EBS is guilty of breach of contract, for which “Waveny has suffered and will continue to suffer significant harm,” as well as gross negligence, willful misconduct and breach of fiduciary duty. The suit seeks money damages, attorneys’ fees and costs, judgment for plaintiff and “such further equitable and legal relief as may be appropriate.”

The case is scheduled for the short calendar on April 2 before Judge Irene Jacobs state Superior Court in Stamford, with jury selection and trial scheduled for January 2019, court records show.

Colbert in December filed objections to the plaintiff’s first set of requests for production, calling the instructions “overly broad and unduly burdensome insofar as they exceed the instruction requirements of the Practice Book.”

Specifically, Colbert objection to a request for all explanation of benefits concerning claims submitted by participants or beneficiaries of the Waveny plan “on the grounds that it seeks explanation of benefits records covering two decades for no other reason than a fishing expedition and pure harassment.”

“The Complaint alleges vague allegations concerning payment issues regarding a small fraction of 1 percent of all claims handled by EBS during its 16-year relationship with plaintiff. EBS literally handled thousands of claims over the course of the parties’ relationship. To the extent that a handful or two of claims, in the past few years only it is alleged, were inadvertently not paid, the checks got lost, medical providers did not cash checks and/or payments otherwise ‘fell through the cracks’ does not warrant a wholesale invasion of EBS’s historical records. The production of every explanation of benefits record ever created by EBS the past 16 years is wholly unreasonable.”

Those records would amount to 10,000 to 12,000 pages per year, he said.

Colbert also objected to requests for: documents received from stop-loss insurers or servicers; and bank statements, reconciliations and cancelled checks.

Attorneys for Waveny Care Center last month filed a formal objection to several of the defendant’s requests for information—for example, the identities of everyone who lodged “complaints and communications” concerning payments not received, details on each such claim (employee name, date of treatment, healthcare provider, amounts owed and paid) and identity of all healthcare providers with past-due balances turned over to debt collectors and attorneys for collection. In each case, the Robinson+Cole attorneys note that those details “cannot be provided by Waveny with substantially greater facility than Defendant could otherwise obtain such information.”

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