UnitedHealthcare seeks arbitration to resolve Envision contract dispute
In a court filing this week, UnitedHealthcare requested arbitration to resolve a lawsuit Envision filed in March. Envision claimed UnitedHealthcare lowered contracted payments to Envision providers and said the payer pushed providers to accept “unreasonable terms.”
UnitedHealthcare said Envision's lawsuit violates the enforceable arbitration clause in their agreement. The payer also criticized Envision’s billing practices.
"We view the UNH dispute as part of the normal course of business in physician services and a side effect of [Envision's] push to move most of its ER business in-network," Jefferies' Brian Tanquilut wrote in an analyst note on Wednesday. "Despite investors' speculation, we continue to believe [Envision's] ongoing strategic review will result in a sale of the company."
Envision employs more than 23,000 clinicians. Its subsidiary, Emcare, provides emergency room physicians to hundreds of hospitals. It garnered notice after The New York Times published an article about out-of-network costs and balance billing in July that used Emcare as an example of a company that can surprise patients with out-of-network bill charges.
The issue of surprise billing, also called balance billing, leads to confused patients with higher hospitals bills than they expected. A patient may visit an in-network hospital, but get cared for by an out-of-network physician who is with a physician-staffing company.
In response to the article last year, a group of investors filed a lawsuit against Envision. They claimed the company did not tell them that EmCare conducts surprise billing. The investors said company “revenues were likely to be unsustainable" because of the negative publicity.
At the end of last year, EmCare agreed to a $29.6 million settlement with the Department of Justice for alleged illegal remuneration for patient referrals to Health Management Associates hospitals. “These physicians prioritized their own financial interests over the needs of their patients,” U.S. Attorney Louis Lappen said at the time.
Meanwhile, UnitedHealthcare has taken aim at Envision and even added a page to its website about balance billing that names Envision as a reason for “outsourced ERs” and higher ER costs. UnitedHealthcare also created a PDF highlighting issues with the company.
“There are many issues contributing to the dramatic rise in the cost of ER visits. But one of the more prominent is the growing number of private contractors now operating the ER at your local hospital. Because they are not employees of the hospital, they use it as an opportunity to charge significantly more for your care and in some cases balance bill you for hundreds or thousands of dollars,” UnitedHealthcare wrote.