A self-funded employer in Louisiana is suing Knoxville, Tenn.-based TeamHealth over what it considers inappropriate billing and "systematic overcharges."
The Louisiana Municipal Risk Management Agency, which pays medical expenses for service department personnel like police and ambulance workers, filed the lawsuit March 21. The lawsuit alleges TeamHealth defrauded the employer and others similarly situated by "deliberately" using inflated Current Procedural Terminology codes, also known as upcoding.
"TeamHealth billed using CPT codes appropriate for higher levels of care, when in fact such services were neither appropriate nor provided," the lawsuit alleges.
In the lawsuit, Louisiana Municipal Risk Management Agency alleges that TeamHealth overbilled 81 percent of its claims and often billed for services rendered by physicians when they were performed by a physician assistant.
The employer also argues that TeamHealth is structured to make it harder to identify fraud and inappropriate billing as it is made up of more than 100 local subsidiaries. Although the company is split up with local subsidiaries, it has one central billing office that is "controlled in a cartel-like manner," the lawsuit claims.
"Because TeamHealth uses many different entities and names to carry out its billing scheme, it has been able to mask the enormity of its enterprise and the sheer number of times it has carried out this scheme," the lawsuit reads.
The employer is seeking class-action status for the lawsuit. The proposed class includes every self-funded payer that has paid for TeamHealth's services over the last four years.
The Louisiana Municipal Risk Management Agency is looking to recover damages, restitution and injunctive relief.
"This lawsuit is almost identical to a frivolous lawsuit filed by the same attorneys last year which was quickly dismissed," Team Health said in a statement to Becker's Hospital Review. "TeamHealth engages professional coders who follow CMS and American Medical Association guidelines for coding emergency medicine claims. TeamHealth's coding is subject to a rigorous quality assurance process both internally and externally and is consistent with nationally published database averages."