The trustee overseeing litigation claims for bankrupt Dallas-based Steward Health Care System is suing five payers, alleging they owe the system’s former hospitals at least $56.9 million in unpaid claims.
The trustee, Mark Kronfeld, filed the complaints Feb. 10 and Feb. 11 in the U.S. Bankruptcy Court for the Southern District of Texas, where Steward’s Chapter 11 case is pending. The suits target Florida Blue, Elevance Health’s Wellpoint Texas and Simply Healthcare, Leon Health, Mass General Brigham Health Plan and CareSource, along with several of their subsidiaries.
The largest claim is against Florida Blue for at least $25.4 million related to services provided at seven Florida hospitals. Mr. Kronfeld is also seeking at least $15.5 million from Elevance, $8.2 million from Leon Health, $4.4 million from Mass General Brigham Health Plan, and $3.4 million from CareSource.
The complaints follow a similar pattern, alleging each payer engaged in a “continuous, systematic and wrongful denial of reimbursements” to Steward’s hospitals under their contractual agreements. Mr. Kronfeld claims the payers improperly denied or underpaid thousands of valid claims and exploited the hospitals’ financial distress in the period leading up to Steward’s bankruptcy filing.
“These insurers worsened Steward’s already deteriorated financial condition by refusing to pay valid healthcare claims,” a spokesperson for Mr. Kronfeld told Becker’s. “The trustee intends in these cases and others to redress their holding onto tens of millions of dollars that are property of the Steward bankruptcy estate.”
Steward, once the nation’s largest private for-profit hospital operator, sought Chapter 11 protection in May 2024. Its 31 hospitals have since been sold or permanently closed.
Mr. Kronfeld has been pursuing recovery efforts on behalf of creditors. He filed a $3.4 billion amended complaint in late November against former Steward CEO Ralph de la Torre, MD, and other system leaders, alleging misconduct that caused disruption to Steward’s hospitals and affecting thousands of employees and millions of patients.
Becker’s has reached out to the five payers and will update this story should more information become available.
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