Dive Brief:
- A district judge has declined UnitedHealth’s request for summary judgment in one of many ongoing lawsuits between the health insurance giant and subsidiaries of TeamHealth, a private equity-backed provider group.
- U.S. District Judge John Koeltl on Tuesday rejected UnitedHealth’s argument that New York’s surprise billing law prevents providers from taking legal action against payers for alleged underpayments. TeamHealth said the decision could set a precedent for providers to bring more underpayment claims against payers in states with similar surprise billing laws.
- However, it’s unclear how much the decision — which essentially allows TeamHealth’s litigation to continue — would have any bearing on more than this specific case in New York. “This decision only addressed a threshold legal issue and in no way endorses the merits of TeamHealth Plaintiff’s case,” a UnitedHealthcare spokesperson said.
Dive Insight:
Emergency Physicians of New York and other plaintiffs — TeamHealth groups of providers that staff the emergency rooms of 19 hospitals in New York — sued UnitedHealth in November 2020, alleging the reimbursement they received on thousands of claims was below the reasonable value of the emergency medicine provided, resulting in unjust profits for UnitedHealth.
UnitedHealth filed a motion for summary judgment in September. Summary judgment is a process used to resolve a lawsuit before it goes to trial.
UnitedHealth argued that TeamHealth’s claims of unjust enrichment are barred in light of several state court decisions from cases TeamHealth previously brought against Aetna. The payer argued that New York law doesn’t allow providers to use those claims to pursue reasonable value payment for ER services, as the same plaintiffs litigated and lost on that issue in the previous cases.
The district judge found that argument was unsupported, and ruled New York’s surprise billing law doesn’t stop providers from seeking reasonable insurance claims for emergency medical services.
The prior decisions “did not hold that such claims could never be viable under New York law,” Koeltl wrote in his decision.
Though the first argument in support of summary judgment wasn’t successful, UnitedHealth’s lawyers could bring a second summary motion after the judge gave them permission to do so.
The dispute between UnitedHealthcare and TeamHealth stretches back years and has emerged in a string of litigation as the two jockey over rates — and as TeamHealth’s finances are increasingly pressured by falling emergency room volumes and pricing.
The physician group argues that UnitedHealthcare routinely underpays its doctors, while UnitedHealth says TeamHealth doesn’t participate in its network because it expects to be paid double or even triple the median rate the payer reimburses other physicians.
TeamHealth said it has close to 10 lawsuits pending against UnitedHealth alone. The ER firm has also sued other major insurers, including Centene and Molina, over alleged underpayments.
In late 2021, a Las Vegas jury found that UnitedHealthcare had underpaid thousands of claims for emergency treatment, and awarded TeamHealth almost $63 million in punitive damages and other awards.
And a three-judge panel in Florida in December ruled that UntiedHealthcare underpaid a TeamHealth clinician group and awarded almost $11 million to the provider.
Physician groups like TeamHealth are often fingered as a major driver of out-of-network spending, as their clinicians are often out-of-network even at in-network facilities. One study found out-of-network charges increased significantly after TeamHealth took over a hospital emergency room.
Studies have shown there’s little incentive for physician staffing companies to come in-network with payers. It’s often impossible for patients to shop for the services their clinicians provide, like emergency medicine. That means it’s unlikely they’ll see a reduction in patient volume, even if they fail to negotiate contracts with insurers.
