Knoxville-based TeamHealth is being sued by insurer for ‘fraudulent conduct’ – Tennessee Lookout

An insurer for a Tennessee company embroiled in a medical overbilling scandal is refusing to pay the bill for “fraudulent conduct,” court filings show.

Ironshore Specialty Insurance Company has filed a lawsuit in US District Court against TeamHealth, a Knoxville-based emergency medical outsourcing company. The insurer says in the lawsuit that TeamHealth wants the company to raise money to cover a $42 million settlement of overbilling claims in Texas.

“The (Texas Settlement) arises out of and is based on TeamHealth’s fraudulent conduct in filing false claims with state healthcare programs in order to obtain payment for undelivered and/or medically unnecessary services,” Ironshore’s lawsuit states. “The policy does not cover any losses in connection with a claim against an insured arising out of or arising out of (or) any wrongful act committed with knowledge that it was a wrongful act.”

TeamHealth pioneered hospital emergency care outsourcing and is now one of the largest providers of emergency medicine in the country.

The Knoxville-based firm has been repeatedly accused in courtrooms across the country in recent years of turning emergency rooms into corporate profit centers through “cartel-like” behavior, including price-fixing, legal intimidation and fraud.

Over the past two years, TeamHealth has raised millions of dollars overcharging claims from emergency room patients, understaffing doctors and defrauding government-subsidized insurance companies, but has repeatedly denied any wrongdoing.

TeamHealth is a physician-founded and led network of more than 16,000 frontline clinicians treating patients in emergency rooms, hospitals and clinics across the country.” said the company in an opinion to Tennessee Lookout in connection with the overbilling scandal previously reported by the news organization. “The business model TeamHealth uses to contract physicians through separate but connected professional entities is widely used by hospitals and other healthcare providers.

“No court or administrative body has ever found that TeamHealth’s relationship with an affiliated medical practice violates a corporate practice of medical law,” the statement said.

team health was sued by his insurance company

Insurer: No statement is made

TeamHealth employees in Texas sounded the alarm in a 2016 state whistleblower lawsuit over the company’s alleged overbilling practices, exposing for the first time TeamHealth’s hidden role in patient billing and litigation, and accusing the company of directing programmers to set the prices for to increase medical care in the emergency room a decade.

That lawsuit prompted a number of private and state-subsidized insurers to audit their own books and hire programmers to collect patient records from across the country and examine them for overcharges, court filings show. Those insurers then began filing their own lawsuits, claiming that TeamHealth overstated bills by up to 75 percent statewide.

In June 2021, TeamHealth entered into a $42 million settlement agreement in the Texas whistleblower case. The company then turned to its own insurers, including Ironshore, to help pay that bill.

But Ironshore alleges in its lawsuit against TeamHealth that the company did not notify the insurer that the Knoxville company intended to settle the Texas lawsuit and never gave Ironshore an opportunity to investigate.

“The (Texas plaintiffs) alleged that TeamHealth used two fraudulent schemes … to systematically make false claims against the Centers for Medicare and Medicaid Services for reimbursement for services provided by healthcare providers in TeamHealth emergency rooms,” it said it in the Ironshore suit.

“Additionally, the[Texas plaintiffs]alleged that TeamHealth intentionally conducted these programs in order to improperly receive grossly overpaid amounts of reimbursement,” the lawsuit continued. “Ironshore alleges that TeamHealth failed to comply with the notification requirements in the policy and never sought Ironshore’s approval of defense costs or completion of a settlement with the United States and (Texas whistleblowers).”

Ironshore is asking a federal judge to declare “coverage under the Ironshore Excess Policy is not available to TeamHealth for the defense and resolution” of Texas whistleblower litigation. TeamHealth has not yet filed a response to Ironshore’s lawsuit.