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A Louisiana employer hit TeamHealth with a proposed class-action on Tuesday, alleging the private equity-backed provider unjustly enriched itself by overcharging the group for its workers healthcare services.
The Louisiana Municipal Risk Management Agency—a self-funded employer that pays for the healthcare of police, fire, ambulance and other local service department personnel—sued TeamHealth in the U.S. District Court for the Eastern District of Tennessee, alleging the provider group’s corporate organization and actions violate the federal Racketeer Influenced and Corrupt Organizations Act.
LMRA hopes to represent a proposed class that could include every self-funded payer that paid for TeamHealth’s services over the last four years.
TeamHealth did not immediately respond to an interview request. Private equity firm The Blackstone Group purchased TeamHealth for $6.1 billion in 2017.
The complaint alleges TeamHealth defrauded LMRMA and other payers by inappropriately billing “tens, if not hundreds, of thousands of claims” for care that was either never delivered, contained inflated Current Procedural Terminology codes. LMRMA estimates that 81% of claims TeamHealth submitted were upcoded. The alleged conduct including charging for care delivered by a doctor when really it was delivered by a physicians assistant.
The company was intentionally structured to make it hard to identify inflated medical claims, the complaint said. TeamHealth is made up of more than 100 local provider subsidiaries across the U.S., including fellow defendant ACS Primary Care Physicians Louisiana, in an effort to circumvent corporate practice of medicine laws and hide its pattern of overbilling for services provided, according to the lawsuit.
LMRMA pointed to its central back-office billing department as proof of the cohesive organization of the company, which is “controlled in a cartel-like manner,” the suit says.
“Because TeamHealth uses many different entities and names to carry out its billing scheme, it has been able to mask the enormity of its enterprise and the sheer number of times it has carried out this scheme,” the complaint states.
LMRMA seeks at least $5 million in treble damages, an injunction requiring TeamHealth to update it coding practices and regular audits of its coding practices by an independent monitor.
The employer’s allegations mirror those made by UnitedHealthcare in a lawsuit filed against TeamHealth last year. TeamHealth has at least nine cases pending against the nation’s largest insurer.
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