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Tennessee-based TeamHealth Holdings has won a lawsuit against UnitedHealthcare, which alleged the insurer’s shared savings plan encouraged the underpayment or termination of physician contracts. The suit claimed UHC underpaid on 11,000 claims for a total of about $10.5 million.
It’s not the only lawsuit between the two companies: UnitedHealth is also suing TeamHealth over allegations of overinflating medical codes to get greater reimbursement.
In the suit that was ruled on this week, a Clark County, Nevada jury agreed with TeamHealth that United engaged in unfair reimbursement practices by deliberately failing to pay frontline emergency room doctors adequately for care provided to patients.
The jury assessed punitive damages against UnitedHealthcare, finding it was guilty of fraud and malice in its conduct.
Former UnitedHealthcare executive John Haben, who called the suit “meritless” during the proceedings, said the payer would pay surprise medical bills only if a member complained, and claimed the lawsuit was to distract from TeamHealth members wanting to leave United’s network after demanding too-high reimbursement rates.
TeamHealth said Haben confirmed UnitedHealthcare’s role in collaborating with a Yale University study promoting the view that TeamHealth engaged in balance billing, a conclusion TeamHealth insisted was false. The study, the company said, was one of the reasons why Congress passed legislation giving insurers leverage over frontline providers.
Haben stated under oath that United paid as little as 20% of the clinicians’ billed charges. United’s Shared Savings Program takes up to a 50% administrative fee on the difference between billed charges and United’s payments, according to TeamHealth.
United often receives more money on their shared savings fee than they pay to the provider, TeamHealth claimed.
“TeamHealth is thrilled by the jury’s decision to hold UnitedHealthcare accountable for the considerable harm they have caused to Nevada emergency room clinicians and their patients,” said TeamHealth President and CEO Leif Murphy by statement. “The court evidence clearly demonstrated that United’s refusal to adequately reimburse emergency medicine physicians was intentional and will no longer be tolerated.”
WHAT’S THE IMPACT
Though that particular suit is now settled, there still remains UnitedHealth’s lawsuit against TeamHealth, which claims that since 2016, TeamHealth has upcoded claims and committed fraud by misrepresenting the services provided.
The United plaintiffs reviewed tens of thousands of commercial health benefits claims submitted by TeamHealth and determined that well over half of the claims TeamHealth submitted to United using the two highest level CPT codes for ER visits – roughly 60% – should have utilized lower-level CPT codes for treating routine health problems, such as sore throats and ear infections.
TeamHealth operates one of the largest emergency room staffing and billing companies in the U.S. It affiliates with or acquires medical groups across the country that have contracts with hospitals and health systems under which the medical groups staff hospital emergency rooms, according to UHC.
“But this is where the medical groups’ involvement ends,” the lawsuit said.
TeamHealth handles coding and billing from centralized billing centers, then submits the claims to insurers under the name of its affiliate or acquired medical group.
No ER physician profited, UHC said. Physicians were paid a flat, hourly rate.
THE LARGER TREND
TeamHealth was acquired by private equity firm Blackstone in 2017. Since then, the company has made an “aggressive pursuit of profit” that has drawn the ire of patients, insurers, and the government, UHC said in its lawsuit.
As for this week’s favorable verdict for TeamHealth, Dr. Scott Scherr — Regional Medical Director for TeamHealth and Freemont Service, and one of the first responders who reported to Sunrise Hospital and Medical Center in the aftermath of the 2017 Las Vegas Mass Shooting — weighed in on the jury’s decision.
“For far too long, emergency room physicians have been crippled by United’s unfair reimbursement practices,” said Scherr. “Today’s ruling is a major victory for our frontline healthcare heroes who, for years, have played an integral and essential role in protecting the health and safety of the Las Vegas community.”
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