New York ER docs sue UnitedHealth for alleged underpayments

Emergency room sign
New York emergency physicians have filed suit against UnitedHealth Group over out-of-network claims. (Getty/Nils Versemann)

New York emergency room docs are suing UnitedHealth Group and provider network management firm Multiplan, alleging the two conspired to underpay them for out-of-network claims.

In the lawsuit, the group of staffing firms, all of which are out of network for UnitedHealthcare, claim that the insurer and Multiplan worked together using Multiplan's Data iSight platform to set their own "reasonable" rates for out-of-network claims, which undercut payments to the docs.

The docs claim UnitedHealth and Multiplan withheld billions in payments.

Emergency room physicians are barred from using balance billing to recoup the lost expenditures, the doctors argue.

"Receiving payment for a reasonable amount or usual and customary amount is essential because, unlike other situations involving out-of-network providers, when a commercially insured patient receives emergency medical services in New York, the emergency healthcare provider is prohibited from balance-billing the patient," they wrote.

RELATED: UnitedHealthcare and Envision extend contract, avoiding coverage lapse for millions

The docs additionally say that they were undercut amid the backdrop of the COVID-19 pandemic, when they were putting their lives at risk to treat patients. A number of the instances cited in the lawsuit occurred in 2020.

UnitedHealthcare said in a statement to Fierce Healthcare that it believes "the lawsuit is meritless" and said it plans to "aggressively defend" against the "baseless claims."

“A small number of providers, and especially private equity-backed physician staffing companies like TeamHealth, are driving up the cost of care for the people and customers we serve. Some of the TeamHealth provider groups that are not part of our network today charge 700-900% of Medicare rates for the care they provide," the insurer said.

"This sort of excessive pricing from out-of-network providers contributes to skyrocketing health care costs for everyone. TeamHealth has filed a lawsuit in an attempt to challenge our efforts to address the unreasonable and anticompetitive rates its providers charge," UnitedHealth said.

UnitedHealthcare, as the largest insurer in the country, has played hardball with a number of physician staffing firms including TeamHealth and Envision as part of an industrywide back-and-forth on how to address surprise medical billing.

These firms provide a large number of physicians to hospital emergency departments, an arrangement that is a common source of surprise bills when a patient is treated at an in-network hospital by an out-of-network physician.

TeamHealth also hit UnitedHealth with a lawsuit after it cut certain out-of-network reimbursements by 50%.