St. Luke's Health System filed a lawsuit Tuesday against its insurance company, alleging breach of contract when the insurer stopped reimbursing St. Luke's for legal costs stemming from a 2013 federal antitrust lawsuit.
The Boise health system told the Idaho Statesman last month that its unreimbursed bills so far total $8.1 million.
U.S. District Judge B. Lynn Winmill ruled in January that the system broke antitrust laws when it bought Nampa's Saltzer Medical Group. St. Luke's is appealing that decision.
The complaint against Allied World National Assurance Co. and Darwin National Assurance Co. — which the lawsuit calls "Allied" collectively — says the insurer paid St. Luke's defense costs through November 2013, but then stopped paying. The bills are continuing to pile up, St. Luke's said.
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The policies provided up to $25 million in liability coverage. But Allied declined coverage for claims in March.
The insurer told St. Luke's the costs didn't qualify for coverage because the court had issued a "final judgment or adjudication" saying St. Luke's had profited in a way that "was improper or illegal."
"We disagree and are confident the policy language covers our claim for reimbursement," said St. Luke's spokeswoman Beth Toal. "If their interpretation were correct, the antitrust coverage in the policy would be essentially meaningless. We had been working with the insurer to resolve the issue. We regret that we were not able to come to resolution and had to file a legal action."
The insurer also demanded St. Luke's repay all previous reimbursements and refused to pay outstanding defense costs from the 2013 trial, the court documents say.
The lawsuit says St. Luke's insurer also hasn't covered its appeal costs this year and has "refused to pay any fee award that the court might enter in favor of the claimants" — which, based on previous court filings, could approach $10 million.