Surprise medical bills a costly problem for health plans, study says -AND- TeamHealth will pay $60 million to settle CMS overbilling claims

CAL/AAEM News Service at
Mon Feb 20 00:07:22 PST 2017



February 6, 2017


Surprise medical bills a costly problem for health plans, study says 



blem-health-plans-study-says> Healthcare Finance



By Susan Morse


Balance billing undermines competition between health plans and particularly
harms plans offering narrower network products, authors say.


Surprise, out-of-network bills hurt consumers, but two new studies show
these bills undermine competition between health insurance plans and
particularly harm plans that are trying to limit costs by offering narrower
network products.


Contracted, in-network providers agree to accept discounted reimbursement
rates negotiated with health plans, and health plans typically charge
patients lower cost-sharing liability for contracted services.


However, 20 percent of emergency department visits and resulting admissions
at in-network facilities involved an out-of-network physician, according to
the studies published in Health Affairs and The New England Journal of


There's also the problem of balance billing beyond emergency physicians.


Because states play a large role in the regulation of insurance markets and
are knowledgeable of the local market, some legislators have suggested that
surprise balance billing should be addressed at the state level.


More than a dozen states have enacted various protective measures. But even
these states cannot protect more than half of commercially insured consumers
due to a federal law known as the Employee Retirement Income Security Act of


ERISA exempts almost 100 million people in private insurance plans from
state regulation because their plans are self-funded by employers.


Surprise balance billing is not substantially less prevalent under
self-funded employer plans than under other, commercially insured private
plans, Health Affairs said. But removing the patient entirely from the
dispute and automatically deeming the service in-network for purposes of
cost sharing is essential.


Additionally, there seems to be some consensus among states that regulation
should address how much the health plan may owe the provider in surprise
out-of-network billing, setting upper and lower bounds, or at least creating
a dispute resolution mechanism with similar parameters.


The Affordable Care Act limits the cost sharing that health plans may impose
on patients to what they would face at in-network facilities and also limits
what health plans, including those that are self-funded, must pay the


The ACA, however, does not limit what emergency-care providers may balance
bill patients beyond the amounts that health plans allow.


To fully protect patients, federal law should prohibit any balance billing
by providers for emergency services, also including ambulance services, the
study said.


In addition, a comprehensive solution should cover a patient's entire
treatment after coming to the emergency room, including any care during a
hospital admission.


Specifically, the federal government should create a federal default dispute
resolution process for self-funded employer plans that also applies to
state-regulated issuers unless states opt to create their own process that
meets minimum federal standards, the authors said.


Payment standards should also be set by federal law for self-funded health
plans and for state-regulated issuers in states that fail to enact their own
standards, they said.


According to the report, 9 percent of elective inpatient care at an
in-network facility with an in-network lead physician involved an
out-of-network ancillary provider. Also, 51 percent of all ambulance rides
are out of network.


One 2016 survey reported that 21 percent of insured non-elderly adults have,
at some point, received care at a hospital they thought was in-network but
were billed by a non-covered physician. Another Kaiser survey from 2015 said
that, over the past year, 6 percent of households with insurance had
problems paying medical bills stemming from receiving care from an
out-of-network provider.


Often this non-network care is provided by physicians in an emergency
department and involves an anesthesiologist, pathologist, radiologists,
neonatologists or assistant surgeons.




February 7, 2017


TeamHealth will pay $60 million to settle CMS overbilling claims 



mpaign=financedaily> Modern Healthcare



By Maria Castellucci


Physician staffing giant TeamHealth Holdings will pay $60 million to settle
allegations that a hospitalist services provider it acquired overcharged the


IPC, a physician group practice TeamHealth purchased in 2015, allegedly
encouraged its hospitalists to overbill Medicare and Medicaid, according to
the U.S. Justice Department.


According to the lawsuits, IPC encouraged its hospitalists to bill for their
services at the highest possible levels. In some cases IPC hospitalists
billed for more services in one day than could possibly have been provided
in a 24-hour period.


A TeamHealth spokeswoman said the company was aware of the DOJ investigation
and worked closely with the agency to resolve the matter. The allegations at
IPC predate TeamHealth's acquisition.


The suit was initially filed by a former IPC physician, Dr. Bijan
Oughatiyan, who claimed IPC trained its hospitalists to overbill. Some
hospitalists with lower billing levels also allegedly faced pressure by IPC
executives to "catch up" to their colleagues.


As part of the settlement, TeamHealth entered into a five-year Corporate
Integrity Agreement with the HHS' Office of Inspector General, which will
help TeamHealth "promptly detect future fraud and abuse," according to the
DOJ news release.


The company's failure to smoothly integrate IPC after its purchase for $1.6
billion is one of the main causes for poor earnings performance throughout
2016. That prompted private equity firm Blackstone Group to buy TeamHealth
for $6.1 billion.and take it private.


Teamhealh shareholders filed a class-action lawsuit in December, alleging
TeamHealth accepted an inferior takeover offer from the Blackstone when a
much more lucrative bid had been on the table.


The Blackstone acquisition closed Monday.


In addition to dragging down earnings, the debt-financed acquisition of IPC
caused TeamHealth's long-term debt to balloon from $737 million before the
transaction to $2.4 billion after.


The earnings decline and high debt load caused TeamHealth's stock price to
collapse. That drew the attention of bargain-hunting hedge fund Jana
Partners a year ago. The company demanded three board seats to right the
course of TeamHealth's "missteps" by the board and management.


Jana ultimately got the seats and worked to replace long-time CEO Michael
Snow in September with Leif Murphy, the former chief financial officer of
hospital chain LifePoint Health.


Until Envision Healthcare and Amsurg merged this year, TeamHealth was the
nation's largest physician staffing company with about 19,000 employed
physicians and annual revenue of more than $4 billion.


Physician staffing companies contract with hospitals and post-acute
facilities to provide physicians and other clinicians to staff emergency
rooms, serve as hospitalists and staff specialty departments such as
radiology, anesthesiology and neo-natal units.




Jeff Wells
Deputy Editor, CAL/AAEM News Service


Brian Potts MD, MBA
Managing Editor, CAL/AAEM News Service

Contact us at:  < at> at

For more articles, visit our  <>

 <mailto:somcaaem at> To
<>  unsubscribe from this
list, visit our mail server.

Copyright (C) 2015. The California Chapter of the American Academy of
Emergency Medicine (CAL/AAEM).  <> All rights reserved.

CAL/AAEM, a nonprofit professional organization for emergency physicians,
operates the CAL/AAEM News Service solely as an educational resource for
physicians. Dissemination of an article by CAL/AAEM News Service does not
imply endorsement, agreement, or recommendation by CAL/AAEM News Service,

Follow CAL/AAEM on Facebook and Twitter:




This email has been checked for viruses by Avast antivirus software.
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 24675 bytes
Desc: not available
URL: <>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 877 bytes
Desc: not available
URL: <>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 819 bytes
Desc: not available
URL: <>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 1824 bytes
Desc: not available
URL: <>

More information about the CALAAEM mailing list