Consultant sues medical establishment, alleging contract breach

By Carol Ostrow | Mar 4, 2015


A health benefits consultant firm has sued a medical center and its affiliated organizations, alleging non-payment for services contracted.

J&K Consultants filed a lawsuit Feb. 26 in U.S. District Court for the Western District of Pennsylvania against: InterHealth Corp.; Downey Regional Medical Center – Hospital Inc. (DRMC-H); Downey Regional Medical Center Inc.; and Presbyterian Intercommunity Hospital Inc., all of Downey, California.

According to the filing, DRMC-H, a nonprofit public benefit corporation offers a self-insured group health plan and using a third party administrator (TPA) to process claims. The suit states the defendant encountered cash flow issues in December 2012, causing disputes with its TPA. DRMC-H contracted with J&K Consultants in December 2012 for consulting services, the suit states, and J&K agreed to evaluate the benefits program, make recommendations to resolve their problems, help them comply with ERISA, and improve their relationship with their TPA.

Despite appointing the plaintiff as broker of record in January 2013, DRMC-H could not salvage its relationship with its TPA and authorized the plaintiff to solicit new candidates in March 2013, according to the suit.

When Presbyterian Intercommunity assumed management of the hospital June 14, 2013, its new CEO appointed a new broker of record, the suit states, and, subsequently, the defendant failed to pay the plaintiff’s invoices for July through September 2013.

J&K alleges the defendant tried to wrongfully terminate the agreement, leading to breach of contract and unjust enrichment.

The plaintiff seeks $394,200 in compensatory damages, attorney fees and court costs. J&K is represented by attorneys Molley Meacham and Leonard Fornella of Babst, Calland, Clements & Zomnir in Pittsburgh.

U.S. District Court Western District of Pennsylvania court case: 2:15-cv-00271-MRH.

This is a report on a civil lawsuit filed in U.S. District Court for the Western District of Pennsylvania. The details in this report come from an original complaint filed by a plaintiff. Please note that a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt and represents only one side of the story.


More News

The Record Network