TARGET 8 In final months Pinnacle was not paying employees health insurance

At the time, the hospital said it closed because of the "economic hardship of bringing the facility into compliance" with state regulations. 

Former Pinnacle employee Mary Beth Ybarra said she saw the writing on the wall before the closure.

"I knew we wouldn't have any patients on South wing," she said. "So, once I knew the last one was gone in a full 24 hours, I figured, okay, here's where the other shoe is going to drop at."

That same day, two former Pinnacle Regional Hospital nurses filed a class action petitionalleging Pinnacle was taking health care premiums out of their paychecks, but not giving that money to Anthem. Anthem would, in turn, provide health insurance for employees. As a result, they were without insurance coverage for months.

According to the lawsuit, Pinnacle acted "without justification, either in a malicious attempt to procure additional monies that it was not entitled to or with reckless disregard for the damage and harm such action would have on Plaintiffs and the Class."

It was not until Ybarra went to a medical appointment elsewhere that she realized she was not covered.

"They had to do a prior authorization through my insurance before they could see me," she said. "They call to tell me that it was showing inactive."

For Ybarra, it did not make sense.

"I'm not sure why I'm inactive, they're taking it out my paycheck every time I get paid," she said. "I called the hospital, and they said it was a glitch in the home office. And then I called Anthem, and they said, 'No, it shows your inactive, and it's been canceled.'"

Vulnerable and liable, Ybarra tried to make sense of the situation. 

"What if I'm walking down the steps and have a heart attack or be at work and have a heart attack?" she said. "Do I just say, 'Oh, well, I'm going to get over this, don't take me anywhere?' I have no insurance."

With or without insurance, some Pinnacle employees needed medical care and medical procedures done. Employees like Ybarra had to pay for it out of their pocket. 

"I just feel sorry for people who, like me, didn't know and had been to the doctor's office or had an X-ray done, and I've got an X-ray bill, a doctor's office bill, lab bills," she said. "They just keep piling up."

Ybarra's story is similar to that of Tiffany Carmichael and Michelle Rice, the two surgical nurses who are plaintiffs in the lawsuit. Both women sought treatment for medical issues at places they thought were covered by their Anthem plan, but they too were told they had no valid insurance.

On January 3, Pinnacle Regional Hospital Employees started to figure it out.

In response, former Pinnacle Chief Financial Officer Dale Farrell sent out an email to all employees.

"We are aware of the insurance coverage issue with Anthem," he wrote. "Please know that we are working tirelessly with Anthem to resolve this communication issue and are confident it will be resolved quickly."

He went on to say, "We had a telephone conference late last evening with Anthem in which we discussed the terms for reinstatement, we are waiting to hear back for final approval from Anthem."

In an email, Anthem spokesperson Scott Golden said on July 31, 2019, "our contract to provide health insurance coverage for Pinnacle was terminated due to nonpayment."

Around that time, Pinnacle was changing its health insurance policy.

"They were paying for all of us, 100% for us and our spouse and kids," Ybarra said. "Then it got to be, I guess, June they said no, we couldn't afford that no more."

Employees then had a choice. They could continue receiving health insurance through the hospital, but the premiums would be taken out of their paychecks.

For those who did take that option, that money never made its way to Anthem.

"I would like to get my money back, I know what I had taken out and my check," she said. "I hope we can figure out what happened with the insurance and either get her money back or at least go back and pay the bills that have now piled up."

Pinnacle's Problems

While it is not clear what exactly happened to the money, it is clear that Pinnacle has had a lot of problems.

The day before the hospital closed, Farrell sent an email to employees telling them the hospital would not pay them as scheduled on January 15.

"The inflow of cash during the holidays was extraordinarily low," he wrote. "However, we are expecting some significant deposits this week and are optimistic paychecks will be available by Friday (January 17)."

Despite closing before the end of that week, employees were paid that Friday. Pinnacle took insurance premiums out of that check, but not the final check employees received on February 1.

Earlier that week, the hospital's laboratory department closed due to regulatory issues. It also stopped accepting direct inpatient admissions, according to the post. 

The hospital also stopped performing surgeries in early January after a state inspection found issues with the HVAC system, according to the Boonville Daily News.

In addition, in just the past year, Pinnacle has been hit with several lawsuits. 

In December, a company that provided temporary staff sued the hospital for nearly $211,000. 

In November, physician services company Premier Specialty Network, sued Pinnacle for alleged nonpayment of $24,000 for rheumatology services.

On top of all of it, last year, the Missouri Division of Employment Security determined that Pinnacle owes $197,000 in contributions, interest, and taxes. It is not clear whether they have paid. 

Legal Tightrope

So, were Pinnacle's actions legal? 

In short, it is complicated. 

Both state and federal law would prevent Pinnacle from taking the insurance money and not giving employees the benefit, MU law professor Sam Halabi said.

"If an employer just collects premiums and then remits them on the employee's behalf, then under those circumstances, the practice may fall within an exemption to federal law, and Missouri law would apply," he said. "If you do anything more than just collect the premiums, if you, to use the legal term “endorse” a particular insurance company or a particular plan, then you can still be determined to fall under the reach of the federal law."

Halabi said there is a real question as to which law applies, since only one can.

"There's little doubt that the hospital made the decision that it made in 2019 understanding applicable federal law," he said. "But it's going to be close to the line whether or not the federal law applies or Missouri state law applies."

In the case of the complaint filed by the two former surgical nurses, whichever court has jurisdiction will have a significant impact on the situation.

Halabi said federal law is more favorable to the hospital in this case because plaintiffs "will only be able to get the coverage that they were denied or the coverage they should have had."

On the flip side, "under the claims that are made and in the pleading that you have in Missouri state court, they could get punitive damages and more generous compensatory damages."

It's not clear where the legal case will go from here.

As for Ybarra, she was able to go back to her old job as a nurse at Riverdale. 

Moving forward, she said it would be hard for her to trust another employer to take out her insurance.

"My dad always told me you have to earn trust back, and trust is the hardest thing to earn back," she said. "I think me having to trust people again like that, it is going to be an issue for me. So I'll probably check somewhere on my own and get my insurance. That way, I know I'm hand delivering it to them."

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