The high price of CINICO not paying its bills

 “Normally, when you owe somebody money, they knock on your door and say ‘Hey dude, you owe us this money.’”

– Lonnie Tibbetts, CEO, Cayman Islands National Insurance Company


“The Plaintiff Hospitals seek redress against CINICO for CINICO’s failure to pay the Plaintiff Hospitals the full amount owed for services rendered …”
– North Shore Medical Center et al v. CINICO, U.S. District Court for the Southern District of Florida

It appears that not only are CINICO’s creditors knocking on the door; they’re about ready to kick it down and carry away whatever they find inside.
The recent lawsuit filed on behalf of five Florida hospitals (whose legal arguments boil down to, “Those Caymanian deadbeats owe us money, and they know it.”) marks the third time CINICO has been sued in as many months for not paying its bills.

For decades, our public and private sectors have expended immense amounts of resources to craft, polish and project Cayman’s image as a preeminent hub for the world’s wealth and its wealthy. What our country can certainly afford to do is make good on its outstanding medical debts. What our country cannot afford is to allow CINICO to besmirch Cayman’s good name abroad.

The financial costs of the lawsuits are only of secondary consideration to the reputational costs.

Speaking generally, there are three reasons a person or entity can give for not paying a debt:

They won’t pay. (i.e., they are contesting the amount that is owed)

They can’t pay. (i.e., they don’t have the money)

They just … haven’t paid. (i.e., somewhere and somehow, somebody messed up the accounts payable process).

Of those three reasons, only the first could be considered a “legitimate” reason, as far as CINICO is concerned. That, however, does not seem to be the case in this instance, based on documents filed in court so far.

The second reason (not having the money) is not worthy of protracted consideration, given the amounts involved, in the context of CINICO’s annual budget and its access to public funds.

That leaves the third reason, which is the sorriest of all and represents a failure by CINICO to fulfill its fundamental mandate – to pay clients’ medical bills. Nevertheless, that was the excuse cited by Mr. Tibbetts back in November in regard to the two previous lawsuits. “Between July 2013 and December 2014, we managed to pay the majority of our claims, but unfortunately a number of claims fell through the cracks and today are the primary source of these actions,” he said, pinning the blame on the cancellation of CINICO’s contract in 2013 with U.S. claims and payment processor Simplifi, which, incidentally, is also suing CINICO.

Indeed, considering the multiple lawsuits in U.S. courts, and the drama that is still unfolding around the government’s CarePay contract, CINICO has made more headlines recently for its activity in the legal sphere than the healthcare arena. While paying doctors, nurses and hospitals can become very expensive very quickly, that’s nothing compared to the blizzardly accumulation of attorneys’ fees and ancillary damages.

And, we will add, unlike with medical professionals, the only person who feels better after paying a lawyer, is the lawyer.

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  1. Let’s just cut to the chase. CINICO has not been paying the Bills and you are correct in saying this has led to reputational damage for the Cayman Islands. More importantly, people in Cayman who pay premiums to CINICO for Health Insurance may suddenly discover that their Insurance Cards will not be accepted by Health Service Providers – especially overseas. If these involved a serious medical condition, let alone a life threatening issue, to whom do they turn – CINICO is a government organization. Is there a possibility that CINICO is insolvent and improperly continuing to carry on business, and therefore fraudulently accepting premiums from those to whom they have guaranteed coverage for medical costs.

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  2. CINCO needs to be very careful that they are paying a fair and reasonable price for USA hospital services rendered.

    It has been my misfortune to have spent a number of weeks in hospital in Tampa.

    The rates charged for medical services are very flexible depending who is paying.

    For example: I regularly need blood test performed there. The bill is about 100. United Health Care pays them about 10! A 80% discount.

    Hospital rates are bumped up for private patients to cover deadbeats who use hospital services as their primary care physician.
    Hospitals can’t refuse to treat them and end up writing off their bills. And they recover these costs by charging paying patients about 50% more.

    Emergency room costs are outrageous. Example: MY grand-daughter had a high temperature and was taken to Emergency in Tampa. She was put on a drip, given antibiotics and sent hope. She was there about 3 hours. Cost about 1,500 Dollars.

    US hospitals charge for everything. An aspirin given to you in your hospital room will be billed to you (or the insurer) at about 50 Dollars! Not a misprint, I asked for a detailed bill and that was the price. A band-aid is 20 Dollars etc.

    So CINCO needs to negotiate HARD before agreeing to pay bills. They need to negotiate discounts.

    And then of course thye need to PAY THEM!

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  3. More drama from the CIG cutting away at Cayman’s reputation. These are the same people that say they are going to find a huge company to put up the financing for Cayman’s Waste Management solution. With such a tarnished reputation for not paying their bills and backing out of deals after they were signed I find this hard to believe.

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  4. Do I remember right, CINICO was set up by a wise and honourable man, to ensure that those unable to get health insurance could after all get health insurance?
    Yet another uncommitted vote getter that would eventually cost dear, because if one thing is sure, if you can’t get insurance, there might be a reason!
    Instead of this smoke and mirrors arrangement, a bit of honesty would have been better, how about these members of our community need assistance, it will cost us but the Government must pay for it.
    In a strange way, employing unemployable people in CIG amounts to the same thing. Again, the honest way is to support those that need it, and make sure they need it, and budget for the cost, don’t hide the reality and pretend there is no cost!
    CINICO needs to be run properly, or not at all, this situation is bringing discredit on us all, and the man that is to blame is he that set it up!

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  5. Supporters of ObamaCare should take a close look at this and see how unsustainable this is and realize that you have to put a lot of money aside to cover the ongoing costs. What will happen is that in the long run the better facilities will not take patients with this type of insurance because of the reduced payments they receive.

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  6. Norman has an excellent point there.

    There is an insidious culture of hidden massive discounts and overinflated visible costs perpetrated by the insurance companies – it is in their interests for the public to ‘perceive’ that healthcare is obscenely expensive.

    If you ‘know’ that some operations can cost a quarter of a million dollars or more, then insurance becomes essential.
    But if you hear that you can shop around and get that 250,000 dollar op for say 30,000 and you’re paying 500 a month for insurance – a five year payback time – the insurance could seem much less ‘essential’.

    The myriad of people seeking sensible health care costs is, after all, the market that brought Dr Shetty to Cayman.

    Sadly CINICO is barely a Guppy compared to the bigger fish from the US – with bargaining power which is almost non existent, ALL they have is the ‘being a good customer’ reputation and through inattention and lack of foresight CINICO have now squandered that too.

    Does Alastair Swarbrick review the CINICO accounts or are they sufficiently non central CIG that they have avoided those checks and balances.

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