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Digital Healthcare Files to Enjoin Two State of Ohio Departments; Charges Bid-Steering and Breach of Agreement in Program to Control Medicaid Overpayment of Insurance Claims
Date:2/14/2008

CLEVELAND, Feb. 14 /PRNewswire-USNewswire/ -- Today Digital Healthcare Systems filed to enjoin the Ohio Department of Administrative Services (ODAS) and the Ohio Department of Jobs and Family Services (ODJFS) regarding a state-issued request for services to coordinate benefits (COB), a procedure in health insurance administration that settles which insurers are primarily responsible for a coverage claim.

Digital Healthcare, headquartered in Cleveland, filed the petition in the Ohio Court of Claims in Franklin County alleging that the state's requirements in the request for bids violates Ohio law requiring free, open competitive bids because the qualifications effectively steer the contract to a prior state vendor. The filing also asserts that a pre-existing exclusivity agreement between the state and Digital Healthcare obliges the state not to contract for these services elsewhere.

Specific to the services required by ODAS and ODJFS is the need to identify whether a private insurance company or Medicaid is responsible for a given medical claim. Recent reports show that 15 percent of Medicaid claims paid should have been covered by private insurance companies, which costs taxpayers in Ohio more than $2 billion annually.

"Digital Healthcare's patented business processes are designed to fix this problem," says Ryan Erwin, Director of Government Affairs. "The state should honor its voluntary exclusivity agreement to respect our property. In addition, Digital Healthcare is the only proper party to enable Medicaid to comply with federal and state laws which mandate determining the primary payer in Medicaid claims."

"Our methodology includes the testing of all 4500 commercial insurers for each claim, filed in real time, to ensure that private insurers pay before Medicare considers a claim," he says.

Erwin explains that ODAS entered into a contract with Digital Healthcare in October of 2001 to participate in the company's National COB Cost Analysis program, at no cost to ODAS. As part of this contract, Digital Healthcare required ODAS to protect the company's investment in the cost analysis and not to share its proprietary automated process with any competitors.

"We believe that the COB work should not have been put out for bids because of our prior contract with the state," says Erwin. "We are also very concerned that ODJFS' definition of a qualified bidder steers the contract award to a specific company. The criteria and credentials listed are irrelevant to the work needed.

Erwin says that Digital Healthcare has the only process that meets the requirements of the Federal Deficit Reduction Act (42 U.S.C. 1902(a)(25), and subsequent Ohio General Assembly legislation (O.R.C. 5101.571), and that the company's process delivers value to the state's medical providers and commercial health plans.

Digital Healthcare is a technology company which automates various business processes in healthcare finance, including the automated determination of insurance primacy among 4500 private payers who post 10 million enrollment changes each month.

Ryan Erwin, Digital Healthcare Pam Barr, Hybrid Marketing

Director of Government Relations 216-774-9274

702-371-9900 barr@hybridmar.com

rerwin@ryanerwinassociates.com


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SOURCE Digital Healthcare
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