UnitedHealth, Cigna, Horizon sued by ER doctors, alleging 'systemic underpayments'
The three health insurers have been hit with lawsuits by the Healthcare Justice Coalition NJ, which claims that doctors are paid just a fraction of their bills for out-of-network services provided.
Health insurance companies are being dragged into court in New Jersey over allegations that they routinely underpay emergency room physicians.
But there are signs that the plaintiff’s business model could be an issue.
Cigna Corp., Horizon Healthcare Services Inc. and UnitedHealth Group have been hit with suits by an organization called Healthcare Justice Coalition NJ.
The coalition is linked to a startup company that buys the right to doctors’ unreimbursed claims, and sues insurance companies for the unpaid amounts, according to the notice of removal filed by UnitedHealth’s lawyer.
According to the New Jersey suits, the defendants pay emergency physicians just a fraction of their bills for out-of-network service provided—22% for Horizon, 25% for UnitedHealth and 35% in the case of Cigna.
This alleged systemic underpayment threatens the stability of the health care system, causing emergency rooms to shut down and resulting in reduced physician coverage, which negatively impacts patient care, the suit claims.
The Healthcare Justice Coalition says in court documents that it seeks to make quality emergency care in New Jersey more accessible by reforming the “problematic behavior” of health care insurance carriers.
The group says it works with emergency physicians, including those in a practice group called NES, which provides emergency services at Saint Michael’s Medical Center in Newark and Trinitas Regional Medical Center in Elizabeth.
Related: UnitedHealth targeted in new lawsuit alleging underpayment of out-of-network ER doctors
It filed suits against Cigna, UnitedHealth and Horizon in Union County Superior Court in November, before voluntarily withdrawing those suits and refiling in Gloucester County Superior Court.
UnitedHealth, represented by Seyfarth Shaw, removed its suit to U.S. District Court on Jan. 26.
The Cigna suit cites the example of emergency physician Ankita Bassi.
In September 2019, Bassi was on duty at Trinitas when an ambulance brought a patient with alcohol poisoning and a slashed wrist, according to the complaint. Bassi observed the patient for 12 hours, ordering medication and restraints because the patient was belligerent. Since the patient had prior suicide attempts, suicide ideation is a high-risk condition, the suit said.
After sending the patient to another facility, Bassi submitted a claim for $1,915 but was paid $510, or 27%, of the billed charges, the suit said.
The suits said the Healthcare Justice Coalition has been assigned reimbursement claims from the physicians and it has the right to sue for the full amount billed or the reasonable value of services.
In the UnitedHealth case, Amanda Lyn Genovese of Seyfarth Shaw said in a notice of removal that the coalition is based in Woodmere, New York, and its sole member and manager is Evin Levin of Brooklyn. Levin’s LinkedIn page says he is director of finance and operations at a New York company called the Allia Group.
The Allia Group, formerly known as eCure, “is an expert in the complex legal and regulatory framework of health insurance and provider reimbursement. The company utilizes novel and proprietary legal strategies to fight for providers and recover underpaid reimbursements,” Levin’s LinkedIn listing says. Levin could not be reached, and a phone number listed on the Allia Group’s website was not in service.
The Allia Group’s website says the company “significantly improves revenue for physicians’ groups by creating value from out-of-network accounts receivable. Allia Group purchases the underpaid claims and serves as the plaintiff with any actions with the insurers. This allows physician groups to preserve their relationships with carriers.”
Allia’s website touts its success in litigation against United Healthcare in the Southern District of Indiana. In that case, Allia sought to recover $15 million in unpaid bills for medical services rendered by an emergency physician group. United Healthcare, represented by Crowell & Moring, moved to dismiss the case for failure to state a claim on which relief could be granted, claiming that the complaint “subsists entirely of conclusory allegations and fails to satisfy Federal Rule of Civil Procedure 8 and Supreme Court pleading requirements.”
U.S. District Judge Tanya Walton Pratt granted a motion last May to dismiss Allia’s claim for suit on account without prejudice but declined to dismiss its claim for unjust enrichment. Allia’s website hailed the ruling.
“In a major victory for emergency physicians and a win for our novel litigation model, Indiana Federal District Court ruled in favor of Allia Group in the case of eCure Indiana Corp. v. United Healthcare Insurance Company,” Allia’s website said.
“This decision is undoubtedly the first of many which will finally hold large insurance carriers such as UnitedHealthcare responsible for their underpayment of out-of-network emergency physicians,” Allia’s website said.
Eric D. Chan of Athene Law in Los Angeles, who represented the plaintiff in the Indiana case, also represents Healthcare Justice Coalition in the New Jersey litigation. He did not respond to a reporter’s message about the litigation. Local counsel in the New Jersey suits, Dante B, Parenti of Lauletta Birnbaum in Sewell, declined to discuss the litigation and referred a reporter to Chan.
Seyfarth Shaw’s Genovese did not respond to a call about the litigation. Cigna and Horizon Blue Cross Blue Shield also did not respond to calls about the litigation.