UnitedHealth Vs TeamHealth Fraud Upcoding Lawsuit November 2020

Case 5:20-cv-05094-JFL Document 37 Filed 11/20/20 Page 1 of 42
IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA
EMERGENCY CARE SERVICES OF Civ. No. 5:20-cv-5094

PENNSYLVANIA, P.C., et al., Judge Joseph F. Leeson, Jr.
Plaintiffs,
v.
UNITEDHEALTH GROUP, INC., et al.,
Defendants.
UNITED DEFENDANTS’ ANSWER AND COUNTERCLAIMS
The Defendants UnitedHealth Group Incorporated; United HealthCare Services, Inc.,
UnitedHealthcare, Inc., UnitedHealth Networks, Inc., UnitedHealthcare Insurance Company,
UnitedHealthcare of New England, Inc., and UnitedHealthcare of Pennsylvania, Inc. (collectively,
“United”), pursuant to Rules 7, 8, and 15 of the Federal Rules of Civil Procedure, and this Court’s
Order of October 22, 2020 (Doc. 14), hereby answer Plaintiffs’ Complaint.
ANSWER
Unless specifically admitted, United denies all of the allegations in the numbered
paragraphs of the Complaint, and further denies that they were responsible for, or liable for, any
of the happenings or events mentioned in the Complaint. To the extent Plaintiffs have included
impertinent material or headings that are inappropriate under Rules 8 and 12(f) of the Federal
Rules of Civil Procedure, no response is necessary and any such inappropriate material should be
stricken. To the extent any headings or inappropriate material are deemed to require a response,
United denies them. United has retained any such headings only for the Court’s convenience.
United further states that UnitedHealth Networks, Inc. is no longer an entity and that the proper
spellings of the entities that Plaintiffs reference in their Complaint are as follows: UnitedHealth
Group Incorporated; United HealthCare Services, Inc.; UnitedHealthcare, Inc.; UnitedHealthcare
Insurance Company; UnitedHealthcare of New England, Inc.; and UnitedHealthcare of
Pennsylvania, Inc. United answers the individual allegations of the Complaint as follows:
NATURE OF ACTION
1. United lacks knowledge or information sufficient to form a belief as to the truth of
the allegations in Paragraph 1 and, on that basis, denies them. To the extent these allegations
require further response, United denies the allegations in Paragraph 1.
2. United denies the allegations in Paragraph 2.
3. United specifically denies the characterization of UnitedHealth Group Incorporated
or United HealthCare Services, Inc. as “insurance companies” and the characterization of
“MultiPlan” as the “data analyst” of the “United Defendants.” United admits that the other existent
“United Defendants” are “insurance companies.” The remaining allegations in Paragraph 3 state
legal conclusions that require no response. To the extent a response is required, United denies the
remaining allegations contained within Paragraph 3.
6. On information and belief, United admits that MultiPlan’s Data iSight tool makes
pricing recommendations for professional claims based on a number of factors, including the
Geographic Practice Cost Index issued by the U.S. Centers for Medicare and Medicaid Services
(“CMS”). United denies the remaining allegations in Paragraph 6.
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the allegations in Paragraph 9 and, on that basis, denies them.
PARTIES
12. United admits that Emergency Care Services of Pennsylvania, P.C., is a for-profit
corporation that provides emergency room staffing services in Pennsylvania. United is without
knowledge or information sufficient to form a belief about the truth of the remaining allegations
in Paragraph 12 and, on that basis, denies them.
13. United admits that Emergency Physician Associates of Pennsylvania, P.C., is a for-
profit corporation that provides emergency room staffing services in Pennsylvania. United is
without knowledge or information sufficient to form a belief about the truth of the remaining
allegations in Paragraph 13 and, on that basis, denies them.
14. United admits that UnitedHealth Group Incorporated is a Delaware corporation
with its principal place of business at 9900 Bren Road East, Minnetonka, Minnesota. United
admits that UnitedHealth Group Incorporated is a publicly held corporation. United admits that
UnitedHealth Group Incorporated is the corporate parent of United HealthCare Services, Inc.
United denies the remaining allegations in Paragraph 14.
15. United admits that United HealthCare Services, Inc. is a Minnesota corporation
with its principal place of business at 9900 Bred Road East, Minnetonka, Minnesota. United denies
the remaining allegations in Paragraph 15.
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16. United admits that UnitedHealthcare, Inc. is a Delaware corporation with its
principal place of business at 9800 Health Care Lane, Minnetonka, Minnesota. United admits that
UnitedHealthcare, Inc. is an indirect subsidiary of UnitedHealth Group Incorporated. United
admits that UnitedHealthcare, Inc., provides certain administrative services to certain health plans.
18. United admits that UnitedHealthcare Insurance Company is a Connecticut
corporation with its principal place of business at 185 Asylum Avenue, Hartford, Connecticut.
United admits that UnitedHealthcare Insurance Company is licensed to do business in
Pennsylvania. United denies the remaining allegations in Paragraph 18.
19. United admits that UnitedHealthcare of New England, Inc. is a Rhode Island
corporation with its principal place of business at 475 Kilvert Street, Suite 310, Warwick, Rhode
Island. United admits that UnitedHealthcare of New England, Inc. is licensed to do business in
Pennsylvania. United denies the remaining allegations in Paragraph 19.
20. United admits that UnitedHealthcare of Pennsylvania, Inc. is a Pennsylvania
corporation. United admits that UnitedHealthcare of Pennsylvania, Inc. is licensed to do business
in Pennsylvania. United denies the remaining allegations in Paragraph 20.
21. United denies that UnitedHealthcare of New England, Inc., provides, operates, or
administers health insurance plans in Pennsylvania. United admits the remaining allegations in
Paragraph 21.
22. United admits that MultiPlan provides services to United. United is without
knowledge or information sufficient to form a belief about the truth of the remaining allegations
in Paragraph 22 and, on that basis, denies them.
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JURISDICTION AND VENUE
23. Paragraph 23 sets forth legal conclusions that require no response. To the extent a
response is required, United denies the allegations in Paragraph 23.
response is required, United is without knowledge or information sufficient to form a belief about
the truth of the allegations in Paragraph 24 and, on that basis, denies them.
FACTUAL ALLEGATIONS
27. United is without knowledge or information sufficient to form a belief as to the
truth of the allegations in Paragraph 27 and, on that basis, denies them.
28. Paragraph 28 sets forth a legal conclusion that requires no response. To the extent
a response is required, United denies the allegations in Paragraph 28.
29. Paragraph 29 sets forth a legal conclusion that requires no response. To the extent
a response is required, United denies the allegations in Paragraph 29.
30. United admits that Plaintiffs have rendered medical services to some members of
health plans insured or administered by United. United lacks knowledge or information sufficient
to form a belief as to the truth of the remaining allegations in Paragraph 30 and, on that basis,
denies them.
31. Paragraph 31 sets forth legal conclusions that require no response. To the extent
Paragraph 31 contains allegations requiring a response, United denies them.
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32. The allegations in Paragraph 32 set forth legal conclusions that require no response.
To the extent a response is required, United denies the allegations in Paragraph 32.
To the extent a response is required, United denies the allegations in Paragraph 33.
The Relationship Between Plaintiffs and Defendants
34. United admits that some of the United Defendants provide health insurance
coverage to their members. United denies the remaining allegations in Paragraph 34.
coverage to their members. United responds that the terms and conditions of member benefit plans
speak for themselves. United denies the remaining allegations in Paragraph 35.
coverage to their members. United responds that the terms and conditions of member benefit plans
speak for themselves. United denies the remaining allegations in Paragraph 36.
To the extent this paragraph contains allegations requiring a response, United states that the terms
and conditions of member benefit plans speak for themselves. United denies the remaining
allegations in Paragraph 37.
To the extent a response is required, United states that any public marketing of available member
benefit plans is consistent with the terms of those plans. United denies the remaining allegations
in Paragraph 38.
39. United admits that a webpage available on uhc.com contains the text that is quoted
in Paragraph 39.
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42. United admits that Plaintiffs are non-participating providers. The Complaint does
not identify any of the specific “reimbursement claims at issue in this lawsuit,” and United
therefore lacks information and knowledge sufficient to evaluate those particular benefit claims.
United lacks knowledge or information sufficient to form a belief as to the truth of the remaining
44. United lacks knowledge or information to form a belief as to the truth of the
45. United lacks knowledge or information to form a belief as to the truth of the
allegations in Paragraph 45 and, on that basis, denies them. In response to footnote 1, United
answers that the allegations in footnote 1 set forth legal conclusions that require no response. To
the extent any response is required, United denies the allegations in footnote 1.
To the extent any response is required, United denies the allegations in Paragraph 46.
To the extent any response is required, United responds that the terms and conditions of member
benefit plans speak for themselves and denies any remaining allegations in Paragraph 47.
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To the extent any response is required, United responds that the terms and conditions of member
benefit plans speak for themselves and denies any remaining allegations in Paragraph 48.
The Reasonable Rate for Non-Participating Emergency Services is Well-Established
49. United admits that there is no written agreement between United and Plaintiffs.
United lacks knowledge or information sufficient to form a belief as to the truth of the remaining
51. The allegations in Paragraph 51 and footnote 2 set forth legal conclusions that
require no response. To the extent a response is required, United denies the allegations in
Paragraph 51 and footnote 2.
The United Providers Have Tried to Pay Non-Participating Providers Unreasonable Rates
55. United admits that, in 2008, former New York Attorney General Andrew Cuomo
announced an industry-wide investigation into health care reimbursement rates. United denies the
remaining allegations in Paragraph 55.
56. United admits that Ingenix is a wholly-owned subsidiary of UnitedHealth Group
Incorporated. United denies the remaining allegations in Paragraph 56.
57. United admits that UnitedHealth Group Incorporated reached an agreement with
former Attorney General Andrew Cuomo in connection with his industry-wide investigation into
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health care reimbursement rates. United responds that the terms of that agreement speak for
themselves. United denies the remaining allegations in Paragraph 57.
58. United admits that former New York Attorney General Andrew Cuomo gave a
statement containing the language that is quoted in Paragraph 58.
59. United admits that United Healthcare Corporation, n/k/a UnitedHealth Group,
United Healthcare Insurance Company, and United HealthCare Services, Inc., among other
defendants, entered into a Settlement Agreement dated January 14, 2009, in settlement of
American Medical Association et al. v. United Healthcare Corporation, et al., Case No. 00-2800
(LMM) (GWG) (S.D.N.Y.). United responds that the Settlement Agreement speaks for itself.
62. United admits that its website contains various references to FAIR Health, but
denies that its website “touts” the use of FAIR Health and its benchmark databases to determine
non-participating, out-of-network payment amounts. United denies the remaining allegations in
Paragraph 62.
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the allegations in Paragraph 67 and footnote 3 and, on that basis, denies them. United lacks
sufficient information because Plaintiffs have provided virtually no information about their
asserted claims (including any claims pertaining to “patient ZA”), and without plan, member, and
claim information, United cannot formulate a response to allegations pertaining to the claims at
issue.
the allegations in Paragraph 69 and, on that basis, denies them. United lacks sufficient information
because Plaintiffs have provided virtually no information about their asserted claims (including
any claims pertaining to “patient ZB”), and without plan, member, and claim information, United
cannot formulate a response to allegations pertaining to the claims at issue.
71. Paragraph 71 contains legal conclusion that requires no response. To the extent
any response is required, United denies the allegations in Paragraph 71.
74. United admits that representatives of one or more United entities in 2017 and 2018
met with various individuals who purported to represent TeamHealth entities, including the
Plaintiffs, to negotiate contracts for TeamHealth affiliated entities to become participating, in-
network providers. United further admits that these negotiations occurred in person, by phone,
and by email correspondence. United lacks knowledge or information sufficient to form a belief
as to the truth of the remaining allegations in Paragraph 74 and, on that basis, denies them.
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75. United admits the allegations in Paragraph 75, except that United lacks knowledge
or information sufficient to form a belief as to the truth of the allegation that the individuals or
entities that “met” with United are properly characterized as “Plaintiffs’ representatives,” and, on
that basis, denies that allegation.
76. United admits that United representatives discussed benchmark pricing with
TeamHealth representatives in the course of their negotiations, but denies the remaining
allegations in Paragraph 76.
84. United admits that some United defendants contract with MultiPlan. United denies
88. United admits that Angie Nierman sent a written proposal to a TeamHealth
representative in July 2019. United denies the remaining allegations in Paragraph 88.
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Defendants’ Civil Conspiracy to Deprive Plaintiffs of Reasonable Reimbursement
Defendants’ Unlawful Acts
Transparency
99. United admits that the website dataisight.com contains the text that is quoted in
Paragraph 99. United responds that the content of the website dataisight.com speaks for itself.
102. United denies that Data iSight determines reimbursement, or did so at any time.
United responds that the terms of its Explanation of Benefit forms speak for themselves. United
denies the remaining allegations in Paragraph 102.
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104. United responds that the terms of the Explanation of Benefit forms speak for
themselves, and denies any allegations in this paragraph inconsistent with their terms. United
denies the remaining allegations in Paragraph 104.
105. United responds that the terms of the Explanation of Benefit forms speak for
themselves, and denies any allegations in Paragraph 105 inconsistent with their terms.
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119. United denies the allegations contained Paragraph 119.
Defensible and Market Tested
121. United admits that the website dataisight.com contains the text that is quoted in this
paragraph. Responding further, United states that the content of the dataisight.com website speaks
for itself. United denies the remaining allegations in Paragraph 121.
124. United responds that the content of Data iSight’s provider portal speaks for itself
and denies any allegation in Paragraph 124 inconsistent with that content. United denies the
125. United responds that the content of the website multiplan.com speaks for itself, and
denies any allegations in Paragraph 125 inconsistent with that content. United denies the
remaining allegations in paragraph 125.
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the allegations in Paragraph 128, including Paragraphs 128(a), (b), and (c) and, on that basis, denies
them. United lacks sufficient information because Plaintiffs have provided virtually no
information about their asserted claims, and without plan, member, and claim information, United
information about their asserted claims, and without plan, member, and claim information, United
the allegations in Paragraph 130 concerning any particular claims for payment for services and, on
that basis, denies them. United lacks sufficient information because Plaintiffs have provided
virtually no information about their asserted claims, and without plan, member, and claim
information, United cannot formulate a response to allegations pertaining to the claims at issue.
United denies the remaining allegations in paragraph 130.
Geographic Adjustment
135. United responds that the content of Data iSight’s provider portal speaks for itself,
and denies any allegations in this paragraph inconsistent with that content. United lacks
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knowledge or information sufficient to form a belief as to the truth of the remaining allegations in
Paragraph 135.
136. United responds that the content of the website multiplan.com speaks for itself, and
denies any allegations in Paragraph 136 inconsistent with that content. United denies the
144. United admits that the specific quotes provided appear on a website that is
maintained by United. United responds that the content of its website speaks for itself. United
denies the allegations in Paragraph 144.
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146. United admits that some United Defendants contract with MultiPlan. United denies
147. United admits that some United Defendants contract with MultiPlan. United denies
information about their asserted claims (including those pertaining to “BB”, “BC” or “BD”), and
without plan, member, and claim information, United cannot formulate a response to allegations
pertaining to the claims at issue.
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COUNT I
Common Law Conversion
All Plaintiffs v. United Defendants
158. United incorporates and reasserts its responses to the allegations in the Complaint
as if fully set forth herein.
the allegations in Paragraph 162 and, on that basis, denies them. United lacks sufficient
information because Plaintiffs have provided virtually no information about their asserted claims,
and without plan, member, and claim information, United cannot formulate a response to
allegations pertaining to the claims at issue.
Responding to Plaintiff’s “WHEREFORE” statement and all subparts thereto, Defendants
deny that they are liable to Plaintiffs in any fashion or in any amount.
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COUNT II
Common Law Conversion
All Plaintiffs v. MultiPlan, Inc.
166. Because the allegations in Count II are made solely against MultiPlan, United does
not respond to the allegations in Paragraph 166.
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Because the allegations in Count II are made solely against MultiPlan, United does not
respond to Plaintiff’s “WHEREFORE” statement and all subparts thereto.
COUNT III
Civil Conspiracy
All Plaintiffs v. All Defendants
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COUNT IV
Breach of Implied-in-Fact Contract under Pennsylvania Law
All Plaintiffs v. the United Defendants
184. In response to Paragraph 184, United admits that there is no written agreement
between United and Plaintiffs.
188. Defendants deny that they are liable to Plaintiffs in any fashion or in any amount.
COUNT V
Quantum Meruit under Pennsylvania Law
All Plaintiffs v. the United Defendants
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199. United admits that Plaintiffs have provided medical services to some members of
health plans insured or administered by United. United denies the remaining allegations in
Paragraph 199. The remaining allegations Paragraph 199 set forth legal conclusions that require
no response.
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203. Defendants deny that they are liable to Plaintiffs in any fashion or in any amount.
JURY DEMAND
United denies that a jury trial is available or appropriate with respect to Plaintiffs’ claims,
but hereby demands a jury of the maximum number of jurors allowed by law on all issues so
triable.
AFFIRMATIVE DEFENSES
Defendants have not yet completed their investigation in this matter. Notably, Plaintiffs
have failed to adequately plead the specific benefit claims at issue in this case, including as to
individual members, the health care coverage those members possessed on the dates of service at
issue, the terms of their various health benefit plans, the specific medical services rendered, and
the payment and processing history to date. Without such basic information, United is unable to
adequately respond to the asserted claims. United reserves all rights to alter or amend its
responsive pleading and affirmative defenses at such time as Plaintiffs provide the information
necessary to identify the benefit claims at issue.
Without assuming the burden of proof where it otherwise rests with Plaintiffs, United
asserts the following defenses as may prove applicable after discovery or trial.
1. To the extent to be determined through review of subsequently identified benefit
claims, some or all of the claims may be preempted by the Employee Retirement Income Security
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Act of 1974 (“ERISA”) to the extent the members in question obtain their health care coverage
through employer-based health plans. Such benefit claims relate to payments under plans
governed by ERISA, and all such claims are both expressly and completely preempted by ERISA.
2. The terms and conditions of the applicable health plans are incorporated by
reference as if fully set forth herein, and bar some or all of the relief requested. United reserves
all rights with respect to asserting this defense once Plaintiffs have adequately identified the
specific benefit claims that they contend were underpaid for purposes of the lawsuit, and the
specific plans at issue.
3. Some or all of Plaintiffs’ billed charges are excessive under the applicable
standards, and/or Plaintiffs have failed to identify any basis for entitlement to demand receipt of
any fixed percentage of billed charges.
4. Some or all of the Plaintiffs’ asserted causes of action are untimely with respect to
the health benefit claims at issue, and/or are subject to statute of limitations or contractual
limitations periods. United reserves all rights with respect to asserting this defense once Plaintiffs
have adequately identified the specific benefit claims that they contend were underpaid, and the
specific health benefit plans at issue.
5. Some or all of the benefit claims asserted are subject to reimbursement rates set by
Plaintiffs’ contractual agreement with Defendant MultiPlan, Inc. United reserves all rights with
respect to asserting this defense once Plaintiffs have adequately identified the specific benefit
claims that they contend were underpaid.
6. To the extent that Plaintiffs have any right to receive health plan benefits, that right
is subject to basic preconditions and prerequisites that have not been established, including that
the patients are members of health benefit plans insured or administered by United on the date of
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service, that the coordination of benefits has been applied, that the services were medically
necessary, that an emergency medical condition was present, that Plaintiffs timely submitted
correctly coded claims and supplied any requested documentation, that any necessary
authorizations were obtained prior to rendering the reported services to United’s members, and
that any requirements of administrative exhaustion were satisfied. Plaintiffs’ claims for relief are
barred, in whole or in part, to the extent they seek to recover amounts for services where:
(i) Plaintiffs submitted benefit claims for services not actually performed; (ii) Plaintiffs submitted
multiple benefit claims for the same services performed or associated costs; (iii) Plaintiffs seek
reimbursement using incorrect procedural terminology or other billing codes in the submission of
their claims, including, for example, where Plaintiffs submitted a claim using a Current Procedural
Terminology (CPT) code that was not justified under the circumstances; (iv) Plaintiffs seek
reimbursement for services rendered after Plaintiffs provided an improper kickback or other
improper benefit to the patient (including where Plaintiffs improperly waived or paid the patient’s
co-payment, coinsurance, deductible, or other amount that the patient was legally obligated to
pay); (v) Plaintiffs seek reimbursement for amounts that fail to take into account co-payment, co-
insurance, deductibles that must be recovered as a matter of law and/or industry practice and/or
any other terms, conditions, exclusions, or limitations of the underlying United plans; and/or
(vi) Plaintiffs failed to exhaust mandatory administrative and/or contractual remedies. United
reserves all rights with respect to asserting any and all such defenses once Plaintiffs have
adequately identified the specific benefit claims that they contend were underpaid.
7. Plaintiffs lack standing to bring all or part of this action, including because, upon
information and belief, and to the extent to be determined through subsequent identification of the
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disputed benefit claims by Plaintiffs, United Healthcare Services, Inc. did not function as an insurer
or issuer of unspecified health plan coverage alleged to be at issue.
8. Plaintiffs’ claims for relief are barred, in whole or in part, to the extent that the
entities joined as Plaintiffs are pursuing benefit claims that they do not possess the legal right to
pursue. United reserves all rights with respect to asserting this defense once Plaintiffs have
adequately identified the specific benefit claims that they contend were underpaid, and the specific
health benefit plans at issue.
9. Plaintiffs’ claims for relief are barred, in whole or in part, to the extent that they
seek to unjustly enrich Plaintiffs by allowing them to retain funds in excess of any amounts due
for covered services under health benefit plans insured or administered by United. United reserves
all rights with respect to asserting this defense once Plaintiffs have adequately identified the
specific benefit claims that they contend were underpaid, and the specific health benefit plans at
issue.
10. Plaintiffs’ claims for relief are barred, in whole or in part, to the extent that Plaintiffs
have not mitigated their damages by seeking reimbursement from other sources, including, but not
limited to, other health benefit plans, programs, or entities that may have had an obligation to pay
for the emergency medical services allegedly rendered by Plaintiffs.
11. Plaintiffs’ claims for relief are barred, in whole or in part, by the equitable doctrines
of waiver, estoppel, laches, and/or unclean hands. United reserves all rights with respect to
asserting this defense once Plaintiffs have adequately identified the specific benefit claims that
they contend where underpaid, and the specific health benefit plans at issue.
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12. Plaintiffs’ claims for relief are barred, in whole or in part, to the extent the monetary
relief sought under theories of restitution, disgorgement, constructive trust and/or any other theory
is not equitable, and thus not available under those theories of liability.
13. Plaintiffs’ claims for relief are barred, in whole or in part, to the extent Plaintiffs
failed to sue the appropriate legal entity. United reserves all rights with respect to asserting this
defense once Plaintiffs have adequately identified the specific benefit claims that they contend
were underpaid, and the specific health benefit plans at issue.
14. Plaintiffs’ claims for relief are barred, in whole or in part, by the doctrines of accord
and satisfaction and/or release. United reserves all rights with respect to asserting this defense
once Plaintiffs have adequately identified the specific benefit claims that they contend were
underpaid, and the specific health benefit plans at issue.
15. Plaintiffs’ claims for relief are barred, in whole or in part, by the doctrines of res
judicata and/or collateral estoppel. United reserves all rights with respect to asserting this defense
once Plaintiffs have adequately identified the specific benefit claims that they contend were
underpaid, and the specific health benefit plans at issue.
16. Plaintiffs’ claims for relief are subject to setoff and/or recoupment with respect to
benefit claims for which United made payment on the basis of CPT or other billing codes included
in Plaintiffs’ submission that Plaintiffs’ clinical records of their patients’ care reveal to have been
improperly submitted, either because Plaintiffs’ clinical records do not support submission of the
codes at all, or because Plaintiffs’ clinical records establish that different codes should have been
submitted.
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17. Plaintiffs are not entitled to relief because they have received all payments due, if
any, for the covered services they rendered to members of health benefit plans insured or
administered by United in accordance with the terms of the applicable health benefit plans.
18. United reserves the right to assert, and hereby gives notice that it intends to rely
upon, any other defense that may become available during discovery proceedings or otherwise in
this case and hereby reserves the right to amend its Answer to assert any such defense.
COUNTERCLAIMS
Defendants and Counter-Claimants UnitedHealth Group Incorporated; United HealthCare
Services, Inc., UnitedHealthcare, Inc., UnitedHealthcare Insurance Company, UnitedHealthcare
of New England, Inc., and UnitedHealthcare of Pennsylvania, Inc. (collectively, “United”) allege
the following counterclaims on their own behalf and on behalf of the health benefit plans that they
administer for recovery of funds owed to United by Emergency Care Services of Pennsylvania,
P.C., and Emergency Physician Associates of Pennsylvania, P.C. (collectively, “TeamHealth
Pennsylvania Plaintiffs” or “Plaintiffs/Counter-Defendants”). United also seeks a declaration that
any unpaid benefit claims submitted by Plaintiffs/Counter-Defendants to United that arose out of
the same wrongful conduct described herein are not payable and an injunction prohibiting
Plaintiffs/Counter-Defendants and its successors from submitting claims that are unsupported by
underlying medical records to United in the future.
OVERVIEW
1. This action arises from Plaintiffs/Counter-Defendants’ submission of claims for
insurance payments to United that improperly represented the nature of the services rendered
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resulting in higher remittance payments to Plaintiffs/Counter-Defendants than those to which they
were entitled.
2. Plaintiffs/Counter-Defendants are health care providers that purport to provide
emergency medical services at several hospitals located in Pennsylvania. They do not have a
contractual relationship with United, but they have rendered medical care, on an out-of-network
basis, to patients who are members of health benefit plans insured or administered by United.
3. As a result of Plaintiffs/Counter-Defendants’ incorrect reporting of the services
they rendered to United’s members, Plaintiffs/Counter-Defendants obtained reimbursements for
various medical services rendered to members of health benefit plans insured or administered by
United to which Plaintiffs/Counter-Defendants were not entitled.
4. Improper billing by health care providers and the resulting overpayment by payors
has been a persistent problem for decades. From 2001 to 2010, the use of claims describing the
services rendered by the healthcare provider with current procedural terminology (“CPT”) codes
denoting high-level emergency department evaluation and management (“E/M”) services that
provide higher payment amounts, including a 21% increase in the use of CPT code 99285. 1 An
analysis of the use of these E/M services codes revealed that Medicare paid $6.7 billion in 2010
for E/M services that providers were not entitled to because providers submitted claims that were
incorrectly coded and/or lacking documentation. 2 Such “upcoding” remains a malignant problem
for health care payors, costing them and the employee benefit plans that they administer billions
1
Department of Health and Human Services Office of the Inspector General, Coding Trends of Medicare Evaluation
and Management Services at 10 (May, 2012), https://oig.hhs.gov/oei/reports/oei-04-10-00180.pdf.
2
Department of Health and Human Services Office of the Inspector General, Improper Payments for Evaluation and
Management Services Cost Medicare Billions in 2010 at 2 (May, 2014), https://oig.hhs.gov/oei/reports/oei-04-10-
00181.pdf.
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of dollars in reimbursement payments for wrongfully submitted and coded claims. 3 For example,
the Centers for Medicare & Medicaid Services (“CMS”) reported losses of $28.91 billion in
improper payments in 2019 on Medicare fee-for-service claims, which include E/M claims, and
$57.36 billion in losses to improper payments on Medicaid claims, also including E/M claims. 4
5. In the same fashion, Plaintiffs/Counter-Defendants routinely submitted claims for
reimbursement to United that misrepresented the services rendered by including current CPT codes
that did not accurately reflect the services performed. For example, Plaintiffs/Counter-Defendants
submitted thousands of benefit claims listing CPT code 99285 to describe the underlying medical
services that they allegedly rendered to United’s members. However, the medical records and
other underlying documentation show that the services actually rendered did not correspond to this
CPT code in the majority of these claims.
6. Relying on these misrepresentations of the medical services allegedly provided to
United’s members, United remitted payments to Plaintiffs/Counter-Defendants—in the form of
plan benefit payments—that it would not otherwise have allowed. United would not have allowed
the excessive plan benefit reimbursements but for Plaintiffs/Counter-Defendants’
misrepresentation of the services allegedly rendered to United’s members, thereby proximately
causing United to suffer money damages.
7. United has been further damaged by Plaintiffs/Counter-Defendants’
misrepresentation of the services allegedly rendered to United’s members because it has had to
3
Department of Health and Human Services Office of the Inspector General, Hospitals Overbilled Medicare $1 Billion
by Incorrectly Assigning Severe Malnutrition Diagnosis Codes to Inpatient Hospital Claims (July, 2020),
https://www.oig.hhs.gov/oas/reports/region3/31700010.pdf.
4
Centers for Medicare & Medicaid Services, 2020 Estimated Improper Payment Rates for Centers for Medicare &
Medicaid Services (CMS) Programs at 2 (Nov 16, 2020), https://www.cms.gov/newsroom/fact-sheets/2020-
estimated-improper-payment-rates-centers-medicare-medicaid-services-cms-programs.
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shoulder the substantial costs of investigating Plaintiffs/Counter-Defendants’ abusive CPT coding
and billing practices, and because it has incurred attorneys’ fees and other costs of litigation in
seeking to recover payment for these improperly reported and billed services.
JURISDICTION AND VENUE
8. This action arises by federal question jurisdiction because each of the benefit claims
in Plaintiffs/Counter-Defendants’ Complaint is completely preempted by the federal Employee
Retirement Income Security Act (“ERISA”) for the reasons detailed in United’s Notice of Removal
(Doc. 1).
9. Because these counterclaims are part of the same case or controversy, and arise out
of the same transactions and occurrences that are the subject matter of the Complaint, this Court
has jurisdiction over these counterclaims pursuant to 28 U.S.C. § 1367 and Rule 13(a) of the
Federal Rules of Civil Procedure.
10. United is asserting an alternative counterclaim seeking relief under ERISA, a claim
which arises under federal question jurisdiction. As such, this Court appropriately has jurisdiction
over this claim pursuant to ERISA § 502(a)(3).
11. Unlike Plaintiffs/Counter-Defendants’ causes of action, United’s state-law
counterclaim is not subject to conflict preemption. For United’s claim to be subject to preemption,
it would need to “relate to” the existence of a plan covered by ERISA such that it was premised
on the existence of a plan adopted by the Plaintiffs/Counter Defendants. See Nat'l Sec. Sys., Inc.
v. Iola, 700 F.3d 65, 84 (3d Cir. 2012) (holding that state law claims are preempted only to the
extent that they relate to conduct after the adoption of the plan). Here, however, Plaintiffs/Counter-
Defendants, as out-of-network providers, never adopted any United plan. Moreover, United’s
counterclaim is predicated on an independent duty that they owe to United to submit truthful and
31
accurate benefit claims and the inequitable consequences of the misrepresentations on the claim
forms submitted to United. See Ass'n of New Jersey Chiropractors v. Aetna, Inc., No. 09-CV-
3761, 2012 WL 1638166, at *7 (D.N.J. May 8, 2012) (holding that a health insurer’s counterclaims
were not preempted because those claims were “based upon an independent duty ... under ... [the]
common law” to not “submit[ ] fraudulent bills to an insurer for payment”).
12. Venue is proper in this Court as the State Court Action (as defined in United’s
Notice of Removal (Doc. 1)) resulting from Plaintiffs/Counter-Defendants’ Complaint is pending
within its jurisdictional confines. See 28 U.S.C. § 1146(a).
FACTUAL ALLEGATIONS
A. United’s Health Benefit Plans
13. United is a health insurer and third-party administrator of employee health benefit
plans, which are sponsored by employers and provide varying health benefits to their members.
The health benefit plans sponsored by employers are subject to, and governed by, ERISA. United
provides insurance and/or administrative services to employer-sponsored health benefit plans,
including the processing of benefit claims for reimbursement of medical services rendered to the
members covered by these benefit plans. For those benefit plans that are insured by United
(“insured plans”), benefit payments are made from United’s own funds. For those benefit plans
for which United acts as a claim administrator (“self-funded plans”), benefit payments are made
from plan funds provided by the employer-sponsor of the self-funded plan. United’s contractual
agreements with employer-sponsors of these self-funded plans typically grant United the express
authority to undertake legal actions to recover overpayments on behalf of the self-funded plans.
14. United reimburses members and beneficiaries who obtain services from non-
participating providers based on the terms of their United-administered plans.
32
15. Plaintiffs/Counter-Defendants are emergency room providers who do not
participate in United’s provider network, and they do not contract with United to set
reimbursement rates for the medical services rendered to United’s members.
16. Non-participating, out-of-network providers may seek reimbursement for covered
services directly from United if an individual member authorizes the provider to do so in writing.
In that case, the non-participating, out-of-network provider must submit a health insurance claim
form to United using the CPT alphanumeric coding regime to indicate the procedure or service
provided, the professional who performed the service, the location at which the service was
provided, and the provider’s standard charge for the service. If the service or procedure is covered
by the member’s plan, then United remits reimbursement directly to the healthcare provider less
any applicable out-of-network deductible, co-insurance, or other amounts for which the member
is responsible. United informs providers that any remaining balances are the responsibility of the
individual members, and that the providers may recover those sums directly from the members.
17. United receives more than one million benefit claims for adjudication and
processing each day. Because it receives hundreds of millions of transactions in claims for benefits
each year, United by necessity relies on the good faith and accuracy of the healthcare providers’
descriptions of the services or procedures allegedly rendered to the members that those providers
report on the claim forms submitted to United. Likewise, United relies on the providers’ statement
of the charges billed for such services or procedures. United relies in good faith on these
representations by the healthcare providers to ensure that providers are promptly and efficiently
compensated for the medical procedures or services they rendered to United’s members.
Moreover, claims administrators could not remit timely payments to healthcare providers in
compliance with prompt payment laws that exist in most states, and could not timely reimburse
33
members if the claims administrator audited each and every submitted claim to determine its
truthfulness and accuracy prior to payment.
18. Therefore, consistent with industry practice, United relies upon healthcare
providers to submit benefit claims for payment that honestly and accurately report and describe
the medical services or procedures rendered on the date of service for which payment is sought.
United’s processing and reimbursement of a benefit claim is not an indication that United
investigated that claim and found the service or procedure reported to have been performed or the
claim to have been properly and truthfully reported; rather, it is by necessity an automated process
in which United reserves the right to audit the claims submission and seek legal remedies to recover
overpayments based on inaccurate and/or improper reporting of billed services and procedures.
19. A healthcare provider’s improper use of billing codes is a misrepresentation of the
services performed, the billed charges, and the facts that directly impact both whether the services
rendered are reimbursable and the reimbursable amount of the benefit claim.
B. Plaintiffs/Counter-Defendants’ Misrepresentations Regarding CPT Codes
20. CPT codes are a set of health-care industry accepted codes published by the
American Medical Association that are used to describe medical procedures and services
performed by healthcare providers.
21. United uses the standardized CMS-1500 claims form (as well as the UB-04 claim
form used for facility claims) to receive reimbursement claims. Both forms include fields that
require the healthcare provider to input a CPT code to denote the service or procedure that the
provider rendered and, as relevant, for which the provider is seeking reimbursement.
22. Reimbursement for these procedures and services is typically tied to the CPT codes
that providers report on the claim form for which they are seeking reimbursement. Different CPT
34
codes denote different levels of service that can produce lower or higher rates of reimbursement
for the reported service. For example, CPT codes 99281 and 99285 both denote that the service
for which the claim is being submitted were E/M services in an emergency department. However,
CPT code 99281 denotes a lower level of E/M services while CPT code 99285 denotes a higher
level of E/M services, resulting in a substantially higher reimbursement amount for CPT code
99285.
23. By using this CPT code 99285 on a claim form, an emergency room physician is
reporting an emergency department visit for the evaluation and management of a patient that meets
the following criteria: (1) the patient has a comprehensive history; (2) the patient requires a
detailed examination; and (3) the situation necessitates medical decision making of high
complexity. All three components are required for appropriate use of CPT code 99285 on a claims
submission. If any one of these criteria is missing, use of a lower level CPT code is necessary for
the claim to be proper.
24. CPT codes 99284 and 99283 similarly denote higher-level E/M services in an
emergency department and each have their own requirements for submission.
25. When United receives a claim submission from Plaintiffs/Counter-Defendants
predicated on CPT codes 99283, 99284, or 99285, United relies on the attestation of the submitting
provider that all of the information on the claim form, including, but not limited to, the CPT code,
was accurate, proper, and that the procedure or service was performed for medically necessary
reasons.
26. Between 2016 and October of 2020, Plaintiffs/Counter-Defendants submitted
thousands of claim forms to United for services reported using CPT codes 99283, 99284, and
99285. United generally paid these claims, again relying on the attestation of the
35
Plaintiffs/Counter-Defendants that they actually rendered the services or procedures as stated, that
the procedure was medically necessary, and that the use of these codes complied with all CPT
reporting and coding requirements.
27. Upon review of the claim submissions that Plaintiffs/Counter-Defendants
submitted to United for procedures and services that they billed using CPT codes 99283, 99284,
and 99285, United discovered that the medical records and other documentation did not support
the use of the reported codes in over 64% of these claims.
28. In particular, for CPT code 99285, United found that the CPT code was unsupported
in approximately 82% of the claims submitted to United by Plaintiff/Counter-Defendant
Emergency Care Services of PA, P.C., and in approximately 79% of the claims submitted to United
by Plaintiff/Counter-Defendant Emergency Physician Associates of PA, P.C. In other words, for
each of these claims, the use of CPT code 99285 was unsupported by the underlying medical
records and documentation maintained by the Plaintiffs/Counter-Defendants. As such, the
reporting of CPT code 99285 improperly resulted in higher remittance payments than those to
which Plaintiff/Counter-Defendants were actually entitled.
29. United paid over $1 million to Plaintiffs/Counter-Defendants for medical services
or procedures in which the CPT codes that they reported in the claim forms were not supported by
the underlying medical records that they maintained of the encounter with United’s members.
United would not have paid Plaintiffs/Counter-Defendants for these benefit claims if United had
been aware at the time that the claims were adjudicated and processed that the medical records and
other documentation maintained by the Plaintiffs/Counter-Defendants showed that they billed
United for medical services or procedures that they did not perform, were not medically necessary,
or did not report properly in compliance with CPT coding standards and guidance.
36
30. Upon information and belief, Plaintiffs/Counter-Defendants submitted claims to
United for medical services or procedures that they did not perform, were not medically necessary
and/or did not report properly in compliance with CPT coding standards and guidance. In doing
so, United made payments to the Plaintiffs/Counter-Defendants for plan benefits that United would
not have made if it knew that the submitted claims misrepresented the services or procedures
allegedly rendered to United’s members. In doing so, United suffered monetary damages that were
proximately caused by the improper claims submitted to United by Plaintiffs/Counter-Defendants.
CAUSES OF ACTION
Unlike the TeamHealth Pennsylvania Plaintiffs’ claims, the United Defendants’ state-law
claims are not preempted by ERISA because they are not premised on a challenge to the United
Defendants’ administration of any health benefits plan. Regardless, should the Court find that
the United Defendants’ state-law claims are preempted for any reason, the United Defendants
bring in the alternative a claim for relief under ERISA.
COUNT 1 - Unjust Enrichment
31. United incorporates by reference every allegation set forth in Paragraphs 1 through
30 above.
32. By submitting benefit claims for medical services or procedures that improperly
described the services or procedures rendered to members of health benefit plans administered by
United, Plaintiffs/Counter-Defendants received a benefit in the form of remittance payments.
33. By accepting these payments, Plaintiffs/Counter-Defendants appreciated these
benefits.
34. Through Plaintiffs/Counter-Defendants’ actions, Plaintiffs/Counter-Defendants
obtained United’s insurance payments to which they were not entitled because the claims did not
37
accurately reflect the services performed on United’s members. These circumstances are such that
it would be inequitable for Plaintiffs/Counter-Defendants to retain the benefit of United’s
unwarranted insurance payments.
35. As a direct and proximate result of Plaintiffs/Counter-Defendants’ unlawful acts,
United has been damaged in a sum in excess of $1 million.
COUNT 2 - Unjust Enrichment under ERISA
36. United incorporates by reference every allegation set forth in Paragraphs 1 through
30 above.
37. In the alternative, United asserts a claim for unjust enrichment under ERISA §
502(a)(3) to pursue appropriate equitable relief. See, e.g., North American Coal Corp. v. Roth,
395 F.3d 916, 917 (8th Cir. 2005) (“It was thus proper for the district court to impose a constructive
trust over the overpaid benefits, permanently enjoin appellants from disposing of or transferring
any of the funds still in their possession and control, and require the return of such funds and a
tracing of any portion of the funds no longer in appellants’ possession or control.”); Pharmacia
Corp. Supplemental Pension Plan, ex rel. Pfizer Inc. v, Weldon, 126 F. Supp. 3d 1061, 1070 (E.D.
Mo. 2015) (upholding unjust enrichment clam under ERISA § 502(a)(3) against motion to
dismiss); Metro. Life Ins. Co. v. Solomon, 996 F. Supp. 1473, 1475 (M.D. Fla. 1998) (stating that
the elements of an unjust enrichment claim under ERISA are “(1) a benefit conferred upon the
defendant by the plaintiff, (2) appreciation by the defendant of such benefit, and (3) acceptance
and retention of such benefit by the defendant under such circumstances that it would be
inequitable for him to retain it without paying the value thereof.”).
38. By submitting insurance claims that improperly reported the healthcare services or
procedures rendered to patients insured under United-administered health plans, United conferred
38
a benefit upon Plaintiffs/Counter-Defendants in the form of remuneration for improperly-
submitted benefit claims.
39. Plaintiffs/Counter-Defendants appreciated these payments, which were not
properly payable under the applicable benefit plans under the actual facts concerning the services
rendered. As discussed above, United paid the misrepresented claims and thereby conferred an
unwarranted benefit upon Plaintiffs/Counter-Defendants.
40. Plaintiffs/Counter-Defendants knew that their actions would induce United to
confer upon it an unwarranted benefit in the form of benefit payments. Plaintiffs/Counter-
Defendants knowingly accepted and retained such payments.
41. ERISA § 502(a)(3) provides that “A civil action may be brought . . . by a participant,
beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this
subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress
such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan.”
42. United acted as a functional fiduciary within the meaning of ERISA § 502(a)(3)
with respect to the benefit claims submitted by Plaintiffs/Counter-Defendants where they utilized
improper and inaccurate CPT coding, to the extent that it exercised discretionary authority in
determining whether to pay each benefit claim, and in what amount. As such, United may seek
relief against Plaintiffs/Counter-Defendants under ERISA § 502(a)(3) to enforce the terms of the
United-administered benefit plans implicated and to recover overpayments made to under the
terms of those plans.
43. It would be inequitable for Plaintiffs/Counter-Defendants to retain the benefit of
United’s payments based on their misrepresented services and improper CPT coding.
39
44. Plaintiffs/Counter-Defendants have been unjustly enriched to the detriment of
United, which has suffered damages as a direct and proximate result of the Plaintiffs/Counter-
Defendants’ actions in a sum in excess of $1 million.
PRAYER FOR RELIEF
WHEREFORE, United prays for the following relief:
That judgment be entered in favor of United on its counterclaims against
Plaintiffs/Counter-Defendants and
1. Restitution and Compensatory Damages;
2. Reasonable attorneys’ fees and costs for United’s ERISA claim;
3. Imposition of a constructive trust on the overpaid funds;
4. Tracing of any funds no longer in Plaintiff/Counter-Defendants’ control; A
declaration that any unpaid claims submitted by Plaintiffs/Counter-Defendants to United that arose
out of the same practices described herein are not payable;
5. Such other legal and equitable relief this Court deems just and proper.
Dated: November 20, 2020 Respectfully submitted,
/s/ K. Lee Blalack, II
Karl S. Myers
STRADLEY RONON
STEVENS & YOUNG, LLP
2600 One Commerce Square
Philadelphia, PA 19103
(215) 564-819
kmyers@stradley.com
Amanda L. Genovese (pro hac vice)
O’MELVENY & MYERS LLP
7 Times Square
New York, New York 10036
(212) 326-2000
40
agenovese@omm.com
K. Lee Blalack, II (pro hac vice)

1625 Eye Street, N.W.
Washington, D.C. 20006
(202) 383-5300
lblalack@omm.com
Dimitri D. Portnoi (pro hac vice)

Natasha S. Fedder (pro hac vice forthcoming)
Jason A. Orr (pro hac vice)
400 South Hope Street, 18th Floor
Los Angeles, California 90071-2899
(213) 430-6000
dportnoi@omm.com
nfedder@omm.com
jorr@omm.com
Counsel for the United Defendants
41
CERTIFICATE OF SERVICE
I, K. Lee Blalack, II, hereby certify that on the date below I caused the foregoing to be filed
with the Court by the electronic filing system and to be served on all counsel of record.
/s/ K. Lee Blalack, II

K. Lee Blalack, II
Dated: November 20, 2020

UnitedHealth Vs TeamHealth Fraud Upcoding Lawsuit November 2020

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UnitedHealth Vs TeamHealth Fraud Upcoding Lawsuit November 2020

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Case 5:20-cv-05094-JFL Document 37 Filed 11/20/20 Page 1 of 42

IN THE UNITED STATES DISTRICT COURT

EMERGENCY CARE SERVICES OF Civ. No. 5:20-cv-5094

UNITEDHEALTH GROUP, INC., et al.,

UNITED DEFENDANTS’ ANSWER AND COUNTERCLAIMS

The Defendants UnitedHealth Group Incorporated; United HealthCare Services, Inc.,

UnitedHealthcare, Inc., UnitedHealth Networks, Inc., UnitedHealthcare Insurance Company,

UnitedHealthcare of New England, Inc., and UnitedHealthcare of Pennsylvania, Inc. (collectively,

Group Incorporated; United HealthCare Services, Inc.; UnitedHealthcare, Inc.; UnitedHealthcare

Insurance Company; UnitedHealthcare of New England, Inc.; and UnitedHealthcare of

1. United lacks knowledge or information sufficient to form a belief as to the truth of

require further response, United denies the allegations in Paragraph 1.

2. United denies the allegations in Paragraph 2.

3. United specifically denies the characterization of UnitedHealth Group Incorporated

or United HealthCare Services, Inc. as “insurance companies” and the characterization of

remaining allegations contained within Paragraph 3.

4. United denies the allegations in Paragraph 4.

5. United denies the allegations in Paragraph 5.

(“CMS”). United denies the remaining allegations in Paragraph 6.

7. United denies the allegations in Paragraph 7.

8. United denies the allegations in Paragraph 8.

9. United lacks knowledge or information sufficient to form a belief as to the truth of

the allegations in Paragraph 9 and, on that basis, denies them.

10. United denies the allegations in Paragraph 10.

11. United denies the allegations in Paragraph 11.

in Paragraph 12 and, on that basis, denies them.

allegations in Paragraph 13 and, on that basis, denies them.

14. United admits that UnitedHealth Group Incorporated is a Delaware corporation

United denies the remaining allegations in Paragraph 14.

the remaining allegations in Paragraph 15.

UnitedHealthcare, Inc. is an indirect subsidiary of UnitedHealth Group Incorporated. United

United denies the remaining allegations in Paragraph 16.

17. United denies the allegations in Paragraph 17.

18. United admits that UnitedHealthcare Insurance Company is a Connecticut

United admits that UnitedHealthcare Insurance Company is licensed to do business in

Pennsylvania. United denies the remaining allegations in Paragraph 18.

Pennsylvania. United denies the remaining allegations in Paragraph 19.

20. United admits that UnitedHealthcare of Pennsylvania, Inc. is a Pennsylvania

corporation. United admits that UnitedHealthcare of Pennsylvania, Inc. is licensed to do business

in Pennsylvania. United denies the remaining allegations in Paragraph 20.

in Paragraph 22 and, on that basis, denies them.

JURISDICTION AND VENUE

response is required, United denies the allegations in Paragraph 23.

response is required, United denies the allegations in Paragraph 25.

26. United denies the allegations in Paragraph 26.

27. United is without knowledge or information sufficient to form a belief as to the

truth of the allegations in Paragraph 27 and, on that basis, denies them.

a response is required, United denies the allegations in Paragraph 28.

a response is required, United denies the allegations in Paragraph 29.

Paragraph 31 contains allegations requiring a response, United denies them.

The Relationship Between Plaintiffs and Defendants

allegations in Paragraph 37.

the allegations in Paragraph 40 and, on that basis, denies them.

the allegations in Paragraph 41 and, on that basis, denies them.

allegations in Paragraph 42 and, on that basis, denies them.

the allegations in Paragraph 43 and, on that basis, denies them.

allegations in Paragraph 44 and, on that basis, denies them.

The Reasonable Rate for Non-Participating Emergency Services is Well-Established

allegations in Paragraph 49 and, on that basis, denies them.

50. United denies the allegations in Paragraph 50.

Paragraph 51 and footnote 2.

52. United denies the allegations in Paragraph 52.