Tennessee-based TeamHealth overcharged ER patients for earaches, strep throat and pregnancy tests, according to $100M lawsuit

Two titans in health care are clashing in court over emergency room charges.

Tennessee-based TeamHealth has been accused by the nation’s largest health insurer of systematically overcharging ER patients for minor medical needs. UnitedHealthcare has filed a $100 million lawsuit in federal court accusing the company of “upcoding.”

The lawsuit lists examples from New York to Texas — with the company’s billing department charging high fees meant for the most complex ER visits to patients who just had strep throat, back pain or an earache.

It’s difficult for health plans — or even the government — to prove charges were intentionally inflated. So UnitedHealthcare undertook its own review of 47,000 claims. For roughly 75% of the charges at the highest level, there was no reasonable justification in the medical records, the lawsuit says. And UnitedHealthcare says the rate of charges at the highest billing code is far higher than other providers.

The litigation places most of the blame on TeamHealth executives and the company’s owners, not the physicians providing the care.

“Notably, no emergency room physician ever saw a dime of this extra revenue,” the lawsuit says. “TeamHealth pays physicians a flat hourly rate, and retains all of the revenue above costs generated by TeamHealth-affiliated medical groups. TeamHealth’s inequitable conduct served only to line the pockets of TeamHealth executives and their private equity backers.”

TeamHealth, owned by private equity giant Blackstone since 2016, employs the doctors in roughly one out of every six emergency rooms in the country. So its Knoxville headquarters controls a large share of the billing that happens in ERs nationwide.

In a statement, CEO Leif Murphy calls the lawsuit “frivolous” and accuses United of profiting — even amid the pandemic — through “down coding claims and refusing to consider the expertise of frontline clinicians who make a diagnosis.”

TeamHealth’s top competitor — Nashville-based Envision — has also been battling health plans over upcoding accusations.

Update: This story has been updated with comments from TeamHealth.