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UnitedHealthcare Hit with $60M Punitive Verdict in Nevada Suit by ER doctors — Updated

December 7, 2021 Bruce Tomaso & Natalie Posgate

A jury in Las Vegas slapped UnitedHealthcare and four affiliates with $60 million in punitive damages Tuesday for what the jury earlier called the insurance giant’s unfair practices in reimbursing Nevada emergency room doctors for their services.

The seven-woman, one-man jury returned the verdict about three hours after beginning its deliberations on punitive damages against UnitedHealthcare and its affiliates. The jury last week found that the insurance concerns had unjustly enriched themselves, breached an implied contract and low-balled payments to ER doctors under claims they submitted. The jurors awarded the doctors who filed the suit roughly $3 million in actual damages; they had asked for $10.5 million.

However, the jury also decided UnitedHealthcare acted with malice, oppression and fraud — paving the way for Tuesday’s hearing and deliberations on punitive damages to be awarded to three emergency room groups owned by the plaintiff, Tennessee-based physician staffing firm TeamHealth.

The trial was closely-watched by the medical and legal communities because it was the third to go to trial and one of numerous disputes between TeamHealth and insurers regarding the fight of boosting ER doctor reimbursement. According to TeamHealth’s lawyers, more than 150 doctors were tuned into virtual platform BlueJeans to watch last week’s closing arguments of the evidentiary phase of the trial, and because BlueJeans maxes out at 200 participants, another 150 were attempting to dial in. 

In a statement, TeamHealth Regional Medical Director Scot Scherr said the evidence at trial “showed UnitedHealthcare’s nefarious scheme to slash payments to the frontline heroes in Nevada in order to make record profits.

“I was shocked by the scheme — and grateful to the jury for recognizing the oppressive conduct and deterring it with the punitive damages award today,” Scherr, also an ER doctor and the medical director of the Clark County Fire Department, said in the statement.

In a statement, a UnitedHealthcare spokesperson said the company will “immediately” appeal the verdict.

“Everyone agrees healthcare costs too much, and today’s decision only adds to the problem,” the statement said. “We will be appealing this decision immediately in order to protect our customers and members from private equity-backed physician staffing companies who demand egregious and anticompetitive rates for their services and drive up the cost of care for everyone.”

In his closing argument on the matter of punitive damages, John Zavitsanos of Houston, the lead attorney for the plaintiff physicians, urged the jury to “whack” the defendants to punish what he called their “reprehensible conduct” and deter it in the future. 

He portrayed UnitedHealthcare, the largest medical insurer in the country, as a greedy, conniving profiteer in the multitrillion-dollar healthcare industry.

“They continue to grow their margins,” he said. “Because there is no enough. There is no enough.”

He suggested punitive damages of at least $100 million. “The only thing they understand is money,” he said.

Lee Blalack, lead attorney for the defendants, acknowledged the jury’s finding that his clients had acted “improperly.” But he urged jurors not to impose unjustifiably “severe sanctions,” noting  that there was no evidence at trial that United’s reimbursement practices had caused injury to any patient or endangered anyone’s safety or health. The dispute, he said, was strictly an economic one.

He declined to recommend a dollar amount to the jury, but called the $100 million figure floated by Zavitsanos “absurd” and “baseless.”

Blalack is head of litigation in the Washington, D.C. office of O’Melveny & Myers.

Zavitsanos is a name partner in the Houston litigation firm of Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing, known commonly as AZA.  His client, TeamHealth, owns the three Las Vegas-area emergency care providers who are plaintiffs in the case:  Fremont Emergency Services, Team Physicians of Nevada and Ruby Crest Emergency Services. Each of the three was awarded punitive damages totaling $20 million.

The two verdicts concluded a month-long trial before Clark County District Judge Nancy Allf. It was the third consecutive outcome to favor TeamHealth in its nationwide legal fight to boost payments to ER doctors, specifically reimbursements under group healthcare plans companies offer to employees through commercial insurers including UnitedHealthcare. TeamHealth has filed 45 such lawsuits against insurers. About half have been resolved. Two dozen are pending, three of them in Texas.

Ten are against UnitedHealthcare, including the next one scheduled for trial, in Florida in the spring. Other defendants in TeamHealth’s sights are Aetna, Community Health Choice and Molina Healthcare of Texas. 

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. The plaintiffs’  lead local counsel was Pat Lundvall of McDonald Carano. Carol Owen, TeamHealth’s chief counsel for commercial litigation, also played a significant role.

The O’Melveny team representing UnitedHealthcare includes, in addition to Blalack, Washington partners Jeffrey Gordon and Keven Feder;  Jason Yan, of counsel in Washington; Los Angeles partner Dimitri Portnoi; Adam Levine, of counsel in Los Angeles; Jason Orr, who held the same position until last month; and Los Angeles associates 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.

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