Last week, a three-judge arbitration panel in Florida ordered UnitedHealthcare (“UHC”) to pay $10.8 million to TeamHealth after it found that the insurer underpaid a TeamHealth-owned physician staffing group, Gulf-to-Bay Anesthesiology Associates, for medical services over a three-year period.
The panel determined that UHC paid TeamHealth only 30% of the reasonable value of the care provided by TeamHealth’s clinicians. In other words, UHC had paid TeamHealth less than a third of what the arbitrators ultimately determined to be a fair level of payment. While the award is not published, it is reported that the panel ruled against TeamHealth’s implied contract and unjust enrichment causes of action, while greenlighting recovery on other causes of action.
The award marks the second major victory for TeamHealth in its prolonged battle against UHC. In 2021, a jury in Las Vegas awarded TeamHealth $60 million in punitive damages against UHC. The jury unanimously found that UHC’s reimbursement practices constituted “oppression, fraud, and malice.” UCH appealed the verdict, and the parties later settled.
UHC is currently suing TeamHealth for $100 million in Tennessee. Filed in October 2021, UHC’s lawsuit alleges that TeamHealth upcoded claims and regularly used high level CPT codes for ER visits when treating conditions such as sore throats and ear infections.
Including the current Tennessee lawsuit, TeamHealth and UHC are currently engaged in eight lawsuits against each other.
The lawsuits are indicative of a larger shake-up between physician staffing groups and insurers. Physician staffing companies—especially emergency medicine groups—often don’t see a benefit to joining an insurer’s network. This is particularly true for emergency care, for which patients usually can’t seek out a particular provider. In such situations, providers often sacrifice higher rates without seeing a gain in directed volume. By operating out-of-network, providers can demand fair value for their services. Insurers, of course, claim that the providers seek grossly inflated rates and that the practice leads to increased costs for everyone. They have every incentive to set rates too low, betting that most providers will not go through the trouble of challenging them in litigation.