UnitedHealth conspiring to deny emergency services payments, lawsuit says
2020 INSDBREF 0583
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By Troy Sepion
WESTLAW Insurance Daily Briefing
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November 11, 2020
(November 11, 2020) - Five New York emergency medical physician staffing firms say in a federal lawsuit that the nation's largest commercial health insurer is conspiring with its payment processing company to shortchange them on payments while "sharing the savings and the profits."
UnitedHealth Group Inc. and Multiplan Inc. have formed an illegal enterprise to avoid paying lawful reimbursements for the physician groups' emergency medical services, the plaintiffs say in a lawsuit filed Nov. 2 in the U.S. District Court for the Southern District of New York.
The plaintiffs; Emergency Physician Services of New York, Buffalo Emergency Associates, Exigence Medical of Binghamton, Exigence Medical of Jamestown and Emergency Care Services of New York, say the defendants have underpaid thousands of claims, costing providers "billions of dollars."
Reasonable rate
According to the complaint, the plaintiffs, as out-of-network providers, do not have a contract with United that would establish a rate of payment, but they are required by law to be paid a "reasonable" rate for services rendered.
Under federal and New York state law, they must treat all patients who visit the emergency room, the suit says.
The plaintiffs allege United and Multiplan have formed an enterprise in violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.A. § 1961(4), to "exploit a false and fraudulently manipulated database" to under-reimburse them.
They say United sent "target prices" for Multiplan to beat, and that Multiplan designed and implemented its payment adjusting product, Data iSight, to use "faulty data" to achieve low payment rates under United's target price.
According to the complaint, Multiplan is paid a percentage of the difference between United's target rate and the number Data iSight delivers as a payment rate.
"The lower the rate that Multiplan produced, the more money Multiplan was paid," the plaintiffs say.
Plaintiffs' reimbursements
Each plaintiff says it has been underpaid by United dozens of times for emergency medical services since 2018.
Emergency Physician Services of New York says it treated a patient in August with a United policy and submitted an invoice for $1,243, the amount it typically receives for that service, according to the complaint.
United paid Emergency Physician Services of New York $395.40, the complaint says. United also sent a provider remittance advice statement that said the allowed amount for the claim was $439.33 with a note indicating that United had used Data iSight for the calculation, the lawsuit says.
According to the complaint, the note said Data iSight used paid-claims data to determine the payment, which the plaintiffs say is misleading because the final allowed amount "bears no resemblance" to the usual rates of providers in the area.
The plaintiffs say the amount listed in FAIR Health, the country's largest database of privately billed health claims, is $1,062.
'Secret' events
The plaintiffs say Multiplan secretly held annual events with United to discuss Data iSight's methodology. They allege United, Multiplan and other Multiplan customers would gather to discuss repricing and "how to make more money off it."
According to the complaint, Data iSight's methodology can be adapted and customized based on input from the insurer.
United and Multiplan partner to use the methodology so the paid-claims rate is presented as independent and defensible, the suit says.
"All of this is a smokescreen meant to hide the fraud," the plaintiffs allege.
The plaintiffs, represented by Napoli Shkolnik PLLC, are seeking a declaration establishing proper payment rates and methodology. They also seek compensatory, consequential, punitive and treble damages, restitution and an order to end the alleged enterprise.