After a monthlong trial, a holiday weekend and a day and a half of deliberation, seven women and one man ruled Monday afternoon in Las Vegas that UnitedHealthcare and four affiliates unjustly enriched themselves, breached an implied contract and engaged in unfair claims practices when it came to reimbursing emergency room doctors in Nevada. The jury also determined that Minnesota-based UnitedHealthcare did so with malice, oppression and fraud — paving the way for punitive damages.
Although the jury awarded roughly $3 million out of the $10.5 million in actual damages that the ER doctors asked for, lawyers for the plaintiffs expect the award could grow astronomically after jurors return next week for the punitive damages portion of the trial. As it stands, the actual damages award is expected to grow to “north of $10 million” when interest and attorneys’ fees are factored in, the plaintiffs’ lead lawyer, John Zavitsanos, said.
By the pattern of Monday’s 75-question jury charge, Zavitsanos’ team is hopeful.
“They did not win on one blank,” Zavitsanos said of UnitedHealthcare. “Seventy-five for 75 is pretty good, I think.”
The jurors reconvene next Tuesday to hear additional evidence and arguments from the lawyers to help them consider how much to award in punitive damages.
In a statement provided to The Texas Lawbook, a UnitedHealthcare spokesperson said the company is “reviewing the implications” of the verdict.
“We remain committed to helping contain rapidly rising healthcare costs for the people and employer customers we’re privileged to serve,” the statement said.
Zavitsanos’ client is Tennessee-based physician staffing firm TeamHealth, which owns Fremont Emergency Services, Team Physicians of Nevada and Ruby Crest Emergency Services, which are three groups of emergency providers in the Las Vegas area and the named plaintiffs in the case.
Monday’s verdict determined the fate of the first dispute to go to trial over the compensation of emergency room doctors through health plans provided by employers via commercial insurance.
It’s an outcome that’s likely reverberating across healthcare circles and could set the tone for related litigation as TeamHealth shifts its attention back to the two-dozen pending cases it has filed against insurance companies across the nation — three of which are in Texas and 10 of which are against UnitedHealthcare.
The verdict also marks another notch in the belt for TeamHealth in its fight to boost ER doctor reimbursements; it’s the third jury trial in a row to result in a multimillion-dollar verdict in favor of the Blackstone Group-owned staffing firm over this issue.
TeamHealth’s next trial date is currently set for next spring in Florida and will again be against UnitedHealthcare.
“The reason this case is important is because United is by far the largest health insurer in the country,” Zavitsanos, a partner at the Houston firm Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, told The Texas Lawbook after Monday’s verdict. “What happens to United has a pretty dramatic effect on what happens with the other insurance companies.”
Because the insurance companies “won’t come to the bargaining table” with TeamHealth over fair reimbursement rates, Zavitsanos said the idea for the litigation is that the collective jury verdicts serve “as a basis by which we can sit down and negotiate and eventually go in-network.”
So far, that strategy has worked with TeamHealth’s first courtroom opponent, Centene Corp., which got hit with a $9.4 million verdict last August. As the parties were set to begin their next trial in Mississippi, Centene “folded, sat down at the negotiation table and reached a settlement to go in-network,” Zavitsanos said. Overall, TeamHealth has filed 45 lawsuits against insurers and about half have already settled.
Other insurers TeamHealth has sued include Aetna, Community Health Choice and Molina Healthcare of Texas.
‘$175 for a Gunshot’
Beyond potential settlements, Zavitsanos said the litigation is important because it advocates for the quality of emergency room care — which his side argued at trial may dwindle if insurers like UnitedHealthcare continue to get away with paying TeamHealth’s ER physicians such low rates.
“Much like the rest of society, it’s only when it becomes a chronic issue that we do anything about it,” Zavitsanos said. “The challenge in this case is to try to use a crystal ball to show jurors what the world would be like if that progression continues.”
For example, jurors were presented evidence that the two Nevada-based UnitedHealthcare defendants in the case, Sierra Health and Life Insurance Company and Health Plan of Nevada, pay a reimbursement rate of $175 — regardless of how severe the condition is that the ER doctor is treating.
“At $175 for a gunshot, that — to use United’s words — is egregious,” Zavitsanos said. “That was their favorite word [at trial]. It was the word they used to describe what our ER doctors were charging, but to pay $175 for [treating] somebody who got shot is … just inexplicable.
“If a doctor is getting $175 for gunshots, you’d like to think most doctors aren’t going to focus on that and are going to give it 100% of their effort,” Zavitsanos added. “But at some point, I have to think there are some doctors on the periphery that are going to think about that and it’s going to influence them and affect healthcare.”
TeamHealth’s lawyers also argued at trial that UnitedHealthcare secretly pulled the strings behind a 2018 Yale study and other “bogus academic studies” that targeted TeamHealth by concluding that the company as well as another private equity physician provider, KKR-owned Envision Healthcare, in essence, manipulate the healthcare system as out-of-network providers by charging high prices to gain bargaining power with insurers over reimbursement rates. The study received a slew of media coverage, including by The New York Times, Washington Post and Bloomberg.
“One of the big issues … is the way United has essentially manipulated academic institutions on social media over the last six years to actually come off like they were the victim,” Zavitsanos said. “This verdict is the first step in correcting all the misinformation that may have been put out.”
Other evidence the jury heard, Zavitsanos said, entailed UnitedHealthcare buying “a physician practice which charges more than we do.
“And the ER physician practice which charges more than we do is making money on both ends,” Zavitsanos said. “They also have this scheme where they go to their self-insured clients that they’re already making a handsome profit from and tell them if [United] can knock down billed charges, [United] will take a contingent fee on that, making literally billions for doing nothing.”
UnitedHealthcare’s lawyers repeatedly argued at trial that TeamHealth, owned by the largest private equity firm in the world, inflated emergency room charges to help with Blackstone’s bottom line — and questioned how much of the ER physicians’ “egregious” fees actually went back to the doctors.
Zavitsanos said none of that was in evidence and made two more points. First, TeamHealth’s profit margin is under 1%, and second, evidence showed that when UnitedHealthcare “cuts the rates to these ridiculous amounts,” an option it keeps in it back pocket is to sue the doctors if they respond negatively — making it difficult for the many three or four-doctor practices to fight back.
“You pick the biggest kid in the schoolyard and if you knock him down, everybody else is going to give you their lunch money,” Zavitsanos said. “It’s why they targeted TeamHealth and why they targeted Envision. I don’t know if we can go toe-to-toe, but we can handle and absorb a long fight that most medical practices cannot.”
The Houston-based AZA team spent seven weeks in Las Vegas in constant danger of sensory overload, and even their trip to and from the courtroom was a vivid reminder of exactly where they were.
“Our transportation every day was a party bus that had a dance pole in the center with flashing lights,” Zavitsanos said.
But the greatest concern, he said, was utterly mundane.
“The No. 1 question for the trial team was where do I do laundry?”
In addition to Zavitsanos, the AZA team representing TeamHealth at trial includes partners Joe Ahmad and Jane Robinson; of counsel Kevin Leyendecker; and associates Jason McManis, Michael Killingsworth and Louis Liao. Lead local counsel was Pat Lundvall of McDonald Carano. Carol Owen, TeamHealth’s chief counsel for commercial litigation, also played a significant role.
O’Melveny & Myers is UnitedHealth’s lead trial counsel, and the team includes Washington, D.C., lawyers Lee Blalack, Jeffrey Gordon, Keven Feder and Jason Yan and Los Angeles lawyers Dimitri Portnoi, Jason Orr, Adam Levine, Hannah Dunham and Nadia Farjood. UnitedHealthcare’s lead local counsel were Lee Roberts of Weinberg, Wheeler, Hudgins, Gunn & Dial and Dan Polsenberg of Lewis Roca Rothgerber Christie.