Asheville – It’s been four months since your hospitalization, and you’re just about to pay off the final balance. Now, you receive a text from TeamHealth claiming you owe a couple thousand dollars for physicians’ fees. They have your patient account number and date of hospitalization, but you only saw two doctors, and you already paid them handsomely. So, you turn to the Google machine to see if this is a phishing scam. Unable to convince yourself that this isn’t a well-funded operation with superior SEO skills, you call the hospital. They say it’s legit, so you call TeamHealth and request an itemization. You try to relax, sit down, pick up the paper, and see that Buncombe County is suing TeamHealth.
To be clear, TeamHealth is not Mission HCA. It’s just a contractor used by many of their ED physicians for billing and collections. “Wait, what? Mission keeps its hands clean by contracting out overbilling to a racket?” you ask. The complaint was filed over a year ago. It has just taken this long for a federal judge to deny all TeamHealth’s attempts to get the case thrown out. The county claims TeamHealth violated the RICO Act, engaged in conspiracy, and practiced common-law unjust enrichment. It is suing for over $5 million for defrauding it and its employees out of tens of millions of dollars.
The county, whose health insurance plan is self-funded, is suing on behalf of employees who were billed for upcodings. Careful stewards of taxpayer dollars, the county found it more than mysterious that in 2019, 63% of submitted claims and in 2021, 60% of claims were coded CPT 99285. According to the court document, this code “is reserved for relatively rare cases in which the patient is at imminent risk of death or loss of psychological function,” and it “is appropriate only when extreme circumstances require the most urgent and extensive treatment.”
The county also performed a statistical analysis, making a histogram of all CPT codes for claims submitted in 2021, and found a distribution heavily skewed toward higher-end codes. Then, it brought in a certified medical coding expert, who compared five patients’ charts to the billing codes assigned. Predictably, he found several instances of upcoding that paid TeamHealth 1.5 to 2.5 times as much as it was owed. The county alleged the scheme had been going on at least since 2017, and as additional support for its claims, it called attention to evidence from two previous lawsuits. One claimed to find overbilling in “nearly two-thirds” of 10,000 bills reviewed; the other claimed to find 75% overbilling in a review of 47,000 charts.
Thickening the plot, the county alleges the contractor obfuscates its dirty deeds, like money launderers, with shell companies, one of which negotiates exclusive provider contracts with hospital EDs. The county is not going after the physicians, as some of them have even sued TeamHealth for withholding their just dues. Evidence provided by the county also includes two whistleblower physicians’ posts about the upcoding in Indeed.com reviews.
U.S. District Judge Clifton L. Corker handily denied a series of attempts by the defendants to dismiss, strike, or stay the litigation. These attempts contrasted sharply with the county’s responses and the judge’s decisions, which tended to cite law and legal precedent and suggest the defendants couldn’t reasonably believe what they were claiming.
Some of the defendants’ claims were technical and deemed irrelevant. Another claim appeared to admit that the shell structure of their enterprise was designed to insulate de facto RICO violations from prosecution. They also claimed, correctly, that medical coding is a discretionary art in which experts may disagree. The county, however, countered that the details of its expert opinion should be discovered in court and not pled in litigation, the hiring of an expert to detect fraud “does not make Defendants’ conduct less fraudulent,” and it can support its statistical claims if called upon to do so.
The judge sided with the county, writing, ‘Although Defendants argue that which CPT code is submitted is a matter of opinion, ‘opinions are not, and have never been, completely insulated from scrutiny. At the very least, opinions may trigger liability for fraud when they are not honestly held by their maker or when the speaker knows of facts that are fundamentally incompatible with his opinion.’” Later, he argued that the county remained exposed to “substantial risk” because the “alleged racketeering enterprise has been inflating billing codes from at least 2017 until the date of the county’s amended complaint, and “the alleged overbilling scheme is built into the way Defendants do business.”