UPDATE: Dec. 8, 2021: A Nevada jury on Tuesday ordered UnitedHealthcare to pay $60 million in punitive damages to TeamHealth, in one of a handful of legal cases between the massive private payer and the physician network.
That’s on top of the $2.65 million already awarded to TeamHealth in initial compensatory damages.
UnitedHealthcare plans to appeal the decision on several grounds, saying the jury wasn’t allowed to hear critical pieces of evidence in the case that may have impacted their verdict, including that TeamHealth sought payment of more than five times the market rate in Nevada, and more than seven times its costs.
"Everyone agrees health care costs too much, and today’s decision only adds to the problem," a UnitedHealthcare spokesperson said. "We will be appealing this decision immediately in order to protect our customers and members from private equity-backed physician staffing companies who demand egregious and anticompetitive rates for their services and drive up the cost of care for everyone."
Meanwhile, TeamHealth CEO Leif Murphy said the ruling sets a "critical precedent" in contests between health insurers and doctors over payments.
The provider group still has pending cases against UnitedHealthcare alleging it shortchanged doctors out of owed reimbursement in New Jersey, Pennsylvania, New York, Florida, Oklahoma and Texas.
- A Las Vegas jury on Monday found UnitedHealthcare guilty of underpaying TeamHealth physicians for emergency services in the latest legal salvo between the nation's largest payer and the private-equity backed provider group.
- Following a monthlong court case, the jury ruled in favor of TeamHealth, which accused UnitedHealthcare of bilking its clinicians out of owed reimbursement and demanded $10.5 million in restitution for the alleged underpayments. The jury awarded TeamHealth $2.65 million in initial compensatory damages, and is considering additional punitive damages to be determined in December.
- The verdict brings to a close one in a number of cases currently pending against Minnesota-based UnitedHealth brought by TeamHealth subsidiaries in Texas, Pennsylvania, New Jersey, New York, Oklahoma and Florida that challenge the payer's reimbursements.
TeamHealth CEO Leif Murphy cheered the verdict in a statement Monday, saying he was "thrilled" by the jury's decision.
"The court evidence clearly demonstrated that United's refusal to adequately reimburse emergency medicine physicians was intentional and will no longer be tolerated," Murphy said.
The suit began last month, when TeamHealth subsidiary Fremont Emergency Services sued UnitedHealthcare in Clark County, Nevada's district court. Fremont alleged the payer, which covers some 50.4 million people, terminated its contracts with the provider group and began reimbursing them at illegally low rates following a 2019 pledge to not balance bill out-of-network patients.
In its suit, TeamHealth claimed the payer was shelling out just 20% of its clinicians billed charges, resulting in $10.5 million in underpayments on 11,000 claims.
UnitedHealthcare denied the allegations, arguing in this suit (and others brought by TeamHealth subsidiaries) that the physician group charges unreasonably high prices which caused it to be removed from UnitedHealthcare's provider networks. The payer claimed TeamHealth's private equity owner, Blackstone Group, which purchased the staffing firm in 2017 for $6.1 billion, has been pushing its providers to generate additional profits by inflating their rates.
A UnitedHealth spokesperson told Healthcare Dive the payer is still reviewing the implications of the decision, but it remains committed to curbing "rapidly rising" healthcare costs for its employer customers and beneficiaries.
Tennessee-based TeamHealth, which employs some 15,000 clinicians nationwide, isn't the only physician staffing firm that's been culled from UnitedHealthcare's networks over pricing squabbles.
Last year, the payer giant cut ties with Mednax, alleging it was charging more than 60% higher than other firms for similar services; and canceled its in-network contracts with PE-backed U.S. Anesthesia Partners in Texas. And, after threatening to drop investment firm KKR-owned Envision from its network in 2018, UnitedHealthcare made good on its warning this year when the payer cut Envision's 25,000 clinicians from its network, citing high prices.
But the Nevada jury agreed with TeamHealth's case on Monday, following more than three weeks of testimony and two days of deliberation.
The jury found UnitedHealthcare engaged in abusive reimbursement practices by deliberately failing to pay ER doctors fair rates for care and found the payer "guilty of oppression, fraud, and malice" in its conduct, prompting potential additional punitive damages on UnitedHealth.
The jury will determine the exact amount of damages following additional witness testimony next week, but TeamHealth's legal team expects damages could be as high as $1 billion.
The current $2.65 million in compensatory damages on the table is a drop in the bucket for UnitedHealth. The diversified healthcare behemoth expects to bring in revenue of about $287 billion in 2021 and about $317 billion in 2022, according to financial guidance released Monday.
The Nevada trial ran parallel to another complaint between the two entities, this time filed by UnitedHealthcare against TeamHealth in a Tennessee district court. The complaint alleges TeamHealth upcoded claims, resulting in the insurer overpaying an estimated $100 million on fraudulent claims since 2016.
The litigation is a case study into the perennial push and pull between provider groups and insurers over bills, a fight that often leaves patients caught in the middle.
Last year, Congress passed the No Surprises Act in an effort to shield patients from surprise medical bills, which patients receive when they inadvertently receive out-of-network care. The legislation banned billing patients for surprise out-of-network treatment starting next year, meaning payers and providers will have to settle disputes over billed amounts between themselves or undergo an independent third-party arbitration process.
Physician groups like TeamHealth are often fingered as a major driver of out-of-network spend, as their clinicians are often out-of-network even at in-network facilities, leaving them free to charge patients unexpected, exorbitant rates even after collecting a portion of the bill from a patient's insurer.
Insurers have raised the alarm about such practices being acquired by profit-driven private equity firms, which have become increasingly interested in healthcare over the past few years.
Studies have shown there's little incentive for physician staffing companies to come in-network with payers, as it's often impossible for patients to shop for the services their clinicians provide, like emergency medicine and anesthesiology. That means it's unlikely they'll see a reduction in patient volume, even if they fail to negotiate contracts with insurers.
TeamHealth, which brought in $3.6 billion in revenue in its final year as a publicly traded company before being acquired by Blackstone, is known for taking to the courts to argue its physicians are being shortchanged by insurers.
Its legal battles have been successful in the past: Last summer, an Arkansas jury ruled in favor of a TeamHealth affiliate, finding a Centene health plan had underpaid the group for years, and awarded $9.4 million in damages.