Physician staffing companies remain under pressure apropos of surprise billing — despite passage of the federal No Surprises Act — with the most recent example a new class action lawsuit filed June 7 in Nashville against Knoxville-based TeamHealth.
North Carolina-based car dealer Gerry Wood Auto Group filed an overbilling complaint in Middle Tennessee federal court, alleging that TeamHealth “on various occasions” inflated the charges for Gerry Wood employees enrolled in the auto group’s self-funded health care plan. The suit outlines two alleged patterns of upcoding chargeable services consistent with established legal precedents for insurance claims billing fraud.
“TeamHealth used two fraudulent schemes to obtain overpayments,” attorneys representing Gerry Wood claim. “The first was the ‘Mid-Level Scheme,’” and the “second unlawful overbilling scheme […] was the ‘Critical Care Scheme.’”
The so-called mid-level scheme is described in the suit as non-physician providers such as nurse practitioners and physician assistants upcoding their servies to those of physicians to trigger higher rates. The critical care scheme mentioned in the suit refers to the allegation that TeamHealth also upcoded the grades of care provided. Critical care is the most costly form of emergency treatment and the suit argues TeamHealth officials billed enrollees in Gerry Wood’s employee benefits plan for critical care services when those were neither provided nor necessary.
“TeamHealth has had a longstanding policy of not balance billing patients,” a TeamHealth spokesperson told the Post. “TeamHealth ties its billed charges to the FAIR Health database, which is an independent national resource.”
FAIR Health is a nonprofit, public charity that espouses transparency for health care costs and insurance data. Its database is the largest index of private health care claims data in the United States (33 billion claim records as of May 2021). Reimbursement data, however, is traditionally kept jointly secret by insurers and care providers.
Despite this connection to a health care cost watchdog, TeamHealth was one of many physician staffing companies and insurers nationwide targeted in a bipartisan, congressional investigation of billing practices, originating from the House Committee on Energy & Commerce and coordinated by then-Chair Lamar Alexander (R-TN) from 2019 to 2020. Others included UnitedHealth Group, Nashville-based Envision Healthcare, CVS Health, Cigna, Health Care Service Corp., Highmark and Anthem. The investigation focused on so-called “surprise billing,” which it correlated with “the current incentives behind the negotiations between providers and insurers.”
Those negotiations can yield surprise billing if an out-of-network staffing company at an in-network facility bills the insurer, which offloads the cost onto the patient because the staffing agency is outside their network. An in-network firm can also be dropped from the network as a result of these negotiations, as was the case this January, when top insurer UnitedHealth dropped Envision from its network shortly after the No Surprises Act went into effect.
That law made it illegal for out-of-network care providers to bill patients more than in-network cost sharing set by insurers. Insurance policies also now have to treat out-of-network and in-network services the same when assessing patient cost-sharing programs like that of Gerry Wood’s benefits plan.
“We fully support the No Surprises Act, as it is unequivocally the right thing for patients by placing the obligation for fair payment for emergency services on the insurer and keeping the patient out of the middle of any payment dispute,” TeamHealth said. “We are concerned that shared savings programs designed by insurers have incented some insurers to terminate emergency medicine providers from their networks, exposing their members to higher co-pay and deductible obligations and to the possibility of balance billing from other providers.”