Lawyers for physician staffing firm TeamHealth and insurer UnitedHealthcare kicked off Week 2 of an anticipated monthlong jury trial in Las Vegas with one less juror, a courthouse evacuation and the first witness — who began testifying last Tuesday — still on the stand.
Clark County District Judge Nancy Allf informed the courtroom Monday morning that juror No. 4 had been excused from service after he called in sick with a stomach virus. Six women and one man will now determine the fate of a closely-watched dispute among healthcare circles that concerns the potential reimbursement of more than $10.5 million in billed ER physician charges.
No more than an hour into the trial’s morning session, court adjourned for roughly two hours after the courthouse issued an evacuation order concerning a potentially explosive item that went through security.
“I want to assure you the building is safe,” Judge Allf told the jury when all courtroom participants returned two hours later, shortly before the lunch break. She said the suspicious item had been “cleared by state police, metro, marshals and apparently a group of dogs.”
At issue in the case is whether UnitedHealthcare paid the appropriate rate for 11,500 claims that arose when TeamHealth clinicians provided emergency care to United-insured patients. The lawsuit is the first to go to trial against a major insurer involving health insurance plans of employers.
Both sides accuse one another of charging or paying “whatever they wanted” for ER services, corporate greed and orchestrating schemes to fatten their own pockets.
The key issue is the definition — and cost — of “reasonable and customary” for emergency — something as defined by FAIR Health, a database for the public aimed at increasing transparency of healthcare costs, based on its dataset of billions of healthcare claims.
In the database are billed charges of ER physicians — displayed with various benchmarks ranking the amount charged — including the 98th percentile, 80th percentile, 70th percentile and 60th percentile. TeamHealth argues that values that fall in the 80th percentile are what are considered reasonable charges, and that’s where TeamHealth’s charges fall.
Owned by Blackstone Group, TeamHealth is the nation’s largest clinical practice. It operates in 47 states, contracts with 16,000 healthcare professionals and treats 30 million patients annually.
Although the case involves Nevada state law, eyeballs across the country are on the trial because there are nine other TeamHealth lawsuits pending against UnitedHealthcare across the country — including one in Houston federal court. Plus, the 10 United suits are only part of the 45 total lawsuits TeamHealth has filed against insurers across the U.S regarding emergency care physician billing rates. Of those, 22 have already settled.
Houston litigation boutique Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing is serving as national trial counsel for Tennessee-based TeamHealth and its affiliated ER practice plaintiffs. O’Melveny & Myers leads the trial for UnitedHealthcare.
TeamHealth is asking the jury to slap UnitedHealthcare with liability on four claims: breach of implied contract, unjust enrichment, unfair insurance settlement and violation of Nevada’s account payroll.
Monday’s security threat put a two-hour delay on an already tight trial schedule, one that the parties are trying to wrap up by Thanksgiving. The testimony of UnitedHealthcare executive John Haben, the first witness in the trial, will now last through the rest of Tuesday, TeamHealth lawyers said Tuesday morning. After Haben’s testimony concludes, TeamHealth is expected to call Rebecca Paradise to the stand, who reported to Haben and took his place as UnitedHealthcare’s vice president of out-of-network programs after Haben retired in August.
TeamHealth lawyers told jurors last week during opening statements that Haben would be up on the stand for three days.
Haben began his testimony late Tuesday after openings, testified all day on Wednesday and most of Monday. The court did not hold trial Thursday and Friday of last week.
So far during Haben’s cross-examination, TeamHealth lawyer John Zavitsanos of AZA has gotten Haben to agree that a $1,400 billed charge for emergency services “is not a lot of money” put in the context of “saving somebody’s life.” Zavitsanos pointed out that UnitedHealthcare only paid $254 for an emergency room charge in which the TeamHealth-affiliated physician billed $1,428. UnitedHealthcare has alleged that TeamHealth’s charges are egregious, but under Zavitsanos’ cross, Haben allowed that $1,428 is reasonable.
Zavitsanos has also questioned Haben about UnitedHealthcare’s Shared Savings Plan — which TeamHealth alleges was part of a five-year scheme to beef up revenues by paying rates below usual and customary levels — as well as the insurer’s alleged behind-the-scenes role in a highly-publicized Yale study that painted TeamHealth in a bad light. The 2018 study concerned out-of-network emergency services rendered by for-profit staffing firms.
Although the lawsuit at its core is about money, lawyers for TeamHealth said during opening statements last Tuesday that the litigation could, on a broader level, impact the overall quality of emergency physician care — a statement that sparked an objection by UnitedHealthcare.
“In business cases, they’re about passing money from one corporate pocketbook to another, but this case is about a little bit more; it’s about the quality of healthcare in Nevada,” said TeamHealth attorney Pat Lundvall of Las Vegas firm McDonald Carano. “In general, you get what you pay for. If you want quality physicians, you have to pay them fairly.”
Lundvall showed jurors a slide which claimed that UnitedHealthcare engaged in “intentional discrimination” against TeamHealth ER doctors because the insurer paid other emergency room providers in Nevada $528 per visit on average while it paid TeamHealth doctors an average of $247 per visit.
AZA lawyer Joe Ahmad told jurors during opening statements that it’s particularly important that UnitedHealthcare pays his client the reasonable and customary rate because unlike urgent care centers, emergency care physicians cannot choose who they treat based on the patient’s ability to pay. ER physicians treat everyone, including those who pay a government rate, which is “far less than the reasonable value,” Ahmad said.
“While United has the ability and the right to insure who it wants to insure … we have to take all of their members,” Ahmad said. “No law requires them to sell health insurance, but if they do, one thing we will demonstrate is they should pay the reasonable value of the doctors, nurse practitioners who provided these services and had been waiting for full payment.”
But O’Melveny partner Lee Blalack, UnitedHealthcare’s lead lawyer at trial, told jurors during his opening statement that TeamHealth’s billing is the opposite of reasonable — and his client is hardly the first to stand up to TeamHealth. In fact, United’s competitors only pay in full what TeamHealth bills about 6% of the time.
While TeamHealth’s lawyers did not inform jurors of their client’s private equity roots, Blalack did, reminding jurors that “the plaintiffs in this case are for-profit companies that staff the ERs, not the actual physicians who render the medical care.
“As you will learn in this trial, the proof will show that the inflated charges set by the for-profit staffing companies are not the reasonable value of those services,” Blalack said.
He also suggested that the true victims to TeamHealth’s exorbitant charges are UnitedHealthcare employer clients and their employees — putting the issue into a local context by mentioning major UnitedHealthcare clients in the Las Vegas area, including Caesar’s Entertainment, MGM Grand and the Las Vegas Metropolitan Police Department.
“At issue is thousands of people in Clark County and across Nevada went to hospital ERs for medical care and doctors who treated them often had no contract with the health plans that paid for most of that care,” Blalack said. “The staffing company that contracted with the ER doctors charge more and more each year for those services, unbound by any contract or any market limit at any time.
“The proof will show that less than reasonable limits are put on the payments for these out-of-network services and the employers and the employees who also bear the costs of those increasing charges pay more and more for that coverage, and they get less and less out of it,” he added.
In response to the four legal claims TeamHealth is lodging against UnitedHealthcare, the insurer maintains that TeamHealth brings the allegations with unclean hands.
“Kind of an odd defense, particularly in the Covid era, but that’s what it is,” Blalack told jurors. “You’re going to see evidence that is part of a scheme to extract higher payments from my clients. TeamHealth plaintiffs engaged in a billing practice that one of their own physicians called fraudulent.”