UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF TENNESSEE
`AT KNOXVILLE
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`LOUISIANA MUNICIPAL RISK
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`MANAGEMENT AGENCY, individually
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`and on behalf of all those similarly situated,
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`Plaintiff,
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`v.
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`TEAM HEALTH HOLDINGS, INC.,
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`AMERITEAM SERVICES, LLC, HCFS
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`HEALTH CARE FINANCIAL SERVICES,
`LLC, and ACS PRIMARY CARE PHYSICIANS )
`LOUISIANA PC,
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`Defendants.
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`Civil Action No. ___________.
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`CLASS ACTION COMPLAINT
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`Plaintiff, the Louisiana Municipal Risk Management Agency (“LMRMA”), for its
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`complaint against Defendants, Team Health Holdings, Inc., Ameriteam Services, LLC, HCFS
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`Health Care Financial Services, LLC, and ACS Primary Care Physicians Louisiana PC
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`(collectively “TeamHealth”), states as follows:
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`I.
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`NATURE OF THE ACTION.
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`1.
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`Plaintiff administers a self-funded insurance plan to cover medical expenses of
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`employees of police departments, fire departments, ambulance and other important local services.
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`Like so many other self-funded plans, Plaintiff has faced ever-rising healthcare costs. Now,
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`Plaintiff has learned, as alleged below, that a significant portion of these escalating healthcare costs
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`is directly attributable to systematic overcharges by the TeamHealth organization whose doctors
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`staff numerous emergency rooms of hospitals.
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`2.
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`This overbilling came as no accident, but rather was the fruit of a deliberate
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`business model and carefully reticulated scheme developed by the TeamHealth organization. The
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`scheme makes the overbilling undetectable using traditional audit metrics. That is by design. As
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`described below, TeamHealth has set up over 100 ostensibly separate provider entities across the
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`nation, each seemingly independent and disconnected from the others. In fact, though, they are all
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`commonly controlled in a cartel-like manner.
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`3.
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`Nearly every facet of the interactions between healthcare providers and the patients,
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`from the timing and selection of services to the words chosen to describe the healthcare services
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`rendered, is impacted by the heavy-handed dictates of TeamHealth. Once the medical records are
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`created, the provider has no idea what will ultimately be charged for those services. All of these
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`provider entities, though, use a common TeamHealth coding and billing facility that facilitates
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`false and fraudulent coding. TeamHealth knows that by sending out the bills under the names of
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`these many separate providers, and by obfuscating its fraud, it would be difficult if not impossible
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`for anyone to spot the overbilling.
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`4.
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`It is now evident from multiple other lawsuits, including two before this Court, that
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`the TeamHealth enterprise systematically overbilled both governmental and private insurance and
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`self-funded payors.1 However, the Plaintiff and other similarly situated self-insured plans are not
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`addressed in any of the prior or pending litigation on this issue. Accordingly, Plaintiff now brings
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`1 See United States ex rel. Hernandez v. Team Fin., L.L.C., No. 2:16-CV-00432-JRG, 2020 U.S.
`Dist. LEXIS 26608, *4-12, 2020 WL 731446 (E.D. Tex. Feb. 13, 2020) (summarizing analogous
`scheme); and Celtic Ins. Co. v. Team Health Holdings, Inc., No. 3:20-cv-00523-DCLC-HBG (E.D.
`Tenn.), ECF No. 1, complaint filed Dec. 10, 2020, ¶¶ 8-17 (same). Plaintiffs do not seek to bring
`a claim for “balance billing” of individuals as alleged in Fraser v. Team Health Holdings, Inc.,
`No. 20-cv-04600-JSW (N.D. Cal.), see Class Action Complaint dated July 10, 2020, ¶ 20 (balance
`billing action brought by “uninsured” individuals).
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`this action to recover damages reflecting the wrongful medical overbilling by the Defendants, on
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`behalf of itself and a putative class of others similarly situated.
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`5.
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`As shown in detail below, TeamHealth is a private equity-owned management
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`company headquartered in Tennessee that staffs many hospitals across the nation. Over the last
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`several years, TeamHealth has engaged in a pattern and practice of health care overbilling2 that
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`has caused harm not only to the Medicare system, and to individual large private insurance payors,
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`but also to self-funded health insurance plans such as Plaintiff’s plan herein, and others that are
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`similarly situated. This lawsuit is brought to recover damages, restitution, and injunctive relief to
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`redress the Defendants’ improper healthcare billing practices.
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`6.
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`During the four-year damages period applicable herein, 3 TeamHealth provided
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`staffing, operation, and billing services to various hospital emergency departments (“EDs”) as a
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`2 See United States ex rel. Hernandez v. Team Fin., L.L.C., No. 2:16-CV-00432-JRG, 2020 U.S.
`Dist. LEXIS 26608, *31, 2020 WL 731446 (E.D. Tex. Feb. 13, 2020) (denying motion to dismiss
`relator’s complaint filed under the False Claims Act, 31 U.S.C. § 3729 et seq. alleging upcoding
`and overbilling fraud); Celtic Ins. Co. v. Team Health Holdings, Inc., No. 3:20-cv-00523-DCLC-
`HBG (E.D. Tenn.) (complaint filed Dec. 10, 2020 alleging
`inter alia systematic
`upcoding/overbilling); Emergency Care Services of Pennsylvania v. UnitedHealth Group, No.
`5:20-cv-5094 (E.D. Pa.), see ECF No. 37 (counterclaim alleging that TeamHealth engaged in
`upcoding on health insurance claims); United Healthcare Services, Inc. v. Team Health Holdings,
`Inc., No. 3:21-cv-00364 (E.D. Tenn.) (same, primary claim); United States ex rel. Oughatiyan v.
`IPC the Hospitalist Co., Inc., No. 09-C-5418, 2015 U.S. Dist. LEXIS 19066, 2015 WL 718345
`(N.D. Ill. Feb. 17, 2015) (denying in part motion to dismiss FCA claim of TeamHealth hospitalist
`overbilling); U.S. ex. rel. Mamalakis vs. Anesthetix Management LLC, 2021 U.S. App. LEXIS
`36193, 2021 WL 5818476 (Dec. 8, 2021) (involving TeamHealth anesthesiologist overbilling).
`3 For Counts One and Two, alleging claims under the Racketeering Influenced and Corrupt
`Organizations Act (“RICO”), 18 U.S.C. §§ 1961-68, the statute of limitations is four years. See
`Rotella v. Wood, 528 U.S. 549, 553 (2000); Agency Holding Corp. v. Malley-Duff & Assocs., Inc.,
`483 U.S. 143, 155-56 (1987); Fraley v. Ohio Gallia County, No. 97-3564, 1998 U.S. App. LEXIS
`28078, *4 (6th Cir. Oct. 30, 1998); Lehman v. Lucom, 727 F.3d 1326, 1330-31 (11th Cir. 2013).
`For Count Three, unjust enrichment, a three-year period should apply. See Moore v. Westgate
`Resorts Ltd., L.P., No. 3:18-CV-00410-DCLC, 2020 U.S. Dist. LEXIS 216516, *35-37, 2020 WL
`6814666 (E.D. Tenn. Nov. 18, 2020); Precision Tracking Sols., Inc. v. Spireon, Inc., No. 3:12-
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`contractor. TeamHealth promised to increase efficiency and profitability, in exchange for a share
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`of earnings. In connection with its staffing, TeamHealth regularly rendered and renders healthcare
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`services to enrollees of group medical plans such as the Plaintiff’s self-funded plan herein. Over
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`time, the enrollees received ED services from TeamHealth staff at various hospitals.
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`7.
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`During the pertinent times, TeamHealth used a fraudulent and intentionally
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`obfuscated scheme4 in order to obtain overpayments from Plaintiff and other similarly situated
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`payors. TeamHealth, using a centralized corporate billing “back office” facility in the
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`organization, and following uniform rules, policies, practices, and procedures, systematically
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`overbilled Plaintiff and other class members by using certain improperly chosen Current
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`Procedural Terminology (“CPT”) codes5 in conjunction with the billing. Plaintiff and other class
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`member plans relied on TeamHealth’s representations in the form of the CT codes that it
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`CV-00626-PLR, 2014 U.S. Dist. LEXIS 92255, *9-12, 2014 WL 3058396 (E.D. Tenn. July 7,
`2014); Carter v. Jackson-Madison County Hosp. Dist., No. 1:10-cv-01155-JDB-egb, 2011 U.S.
`Dist. LEXIS 157329, *5-11 (W.D. Tenn. Dec. 13, 2011); Swett v. Binkley, 104 S.W.3d 64, 67
`(Tenn. Ct. App. 2002); Keller v. Colgems-EMI Music, Inc., 924 S.W.2d 357, 359-61 (Tenn. Ct.
`App. 1996). Further, Plaintiff alleges that tolling applies insofar as the Defendants made active
`efforts to conceal their misconduct. See In re Estate of Davis, 308 S.W.3d 832, 840-42 (Tenn.
`2010); Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 463 (Tenn. 2012).
`4 See United States ex rel. Hernandez v. Team Fin., L.L.C., No. 2:16-CV-00432-JRG, 2020 U.S.
`Dist. LEXIS 26608, *4-12, 2020 WL 731446 (E.D. Tex. Feb. 13, 2020) (summarizing analogous
`scheme); and Celtic Ins. Co. v. Team Health Holdings, Inc., No. 3:20-cv-00523-DCLC-HBG (E.D.
`Tenn.), ECF No. 1, complaint filed Dec. 10, 2020, ¶¶ 8-17 (same). Plaintiffs do not seek to bring
`a claim for “balance billing” of individuals as alleged in Fraser v. Team Health Holdings, Inc.,
`No. 20-cv-04600-JSW (N.D. Cal.), see Class Action Complaint dated July 10, 2020, ¶ 20 (balance
`billing action brought by “uninsured” individuals).
`5 “CPT codes are developed, maintained, and copyrighted by the American Medical Association
`to help ensure uniformity among medical professionals and the health insurance industry. CPT
`codes consist of a group of numbers assigned to every task and service a medical practitioner may
`provide to a patient, including medical, surgical, and diagnostic services.” Witkin v. Bureau of
`Workers' Comp. Fee Review Hearing Office (State Workers' Ins. Fund), 67 A.3d 98, 99 n.4 (Pa.
`Commonwealth Ct. 2013).
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`transmitted across state lines and certified were “true, accurate and complete”6 in accepting claims
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`for payment to their detriment, paying higher rates than were properly due.
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`8.
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`Private payors reimburse providers for higher CPT code services at a higher rate
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`than for lower-coded services. TeamHealth billed using CPT codes appropriate for higher levels
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`of care, when in fact such services were neither appropriate nor provided. Defendants
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`systematically engaged in classic upcoding, that is, specifying a higher code than was appropriate,
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`and submitted fraudulent billing to Plaintiff and numerous other private payors.
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`9.
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`TeamHealth employed its scheme through its billing policies and practices to cause
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`private self-funded plans to overpay. Through the duration of its scheme, TeamHealth fraudulently
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`obtained monies to which it was not entitled from Plaintiff and other self-funded plans during the
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`time period within the statute of limitations for which it employed the scheme.
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`10.
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`During the pertinent times, administrators of self-funded plans, like insurers for
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`fully funded plans, used similar rules to determine amounts to pay TeamHealth based on the CPT
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`codes also used by the Centers for Medicare and Medicaid Services (“CMS”) to pay under the
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`Medicare program. TeamHealth’s scheme violated the CMS rules and the rules used by self-
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`funded plans, alike.
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`11.
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`TeamHealth advertises that it controls its employed coders under uniform and
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`comprehensive guidance. TeamHealth represents to the public that it carefully calibrates its
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`compliance criteria and that it even audits the work performed by its coders. Given that fact,
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`TeamHealth must have acted intentionally, or recklessly, in allowing the subject conduct to occur.
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`6 CMS Form 1500, see preprinted statements on reverse side of the hardcopy version. The
`electronic version is deemed to include the same.
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`12.
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`TeamHealth perpetrated its schemes for the purpose of generating additional profit.
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`The scheme defrauded the Plaintiff and similarly situated plans cumulatively of millions of dollars.
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`II.
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`PARTIES.
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`A.
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`13.
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`Plaintiff.
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`Plaintiff LMRMA is an entity organized and existing or properly licensed under
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`Louisiana law and has an office address of 700 North 10th Street 400, Baton Rouge, LA 70802.
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`Plaintiff is an interlocal risk management agency created pursuant to La. Rev. Stat. § 33:1341 et
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`seq. Plaintiff has established and today administers a group self-insurance fund from contributions
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`of its members in order to pool together workers' compensation risks.
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`B.
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`14.
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`Defendants.
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`Defendant Team Health Holdings, Inc. is a Delaware corporation with its principal
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`place of business at 265 Brookview Centre Way, Suite 400, Knoxville, Tennessee 37919. For
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`jurisdictional purposes it is a citizen of Delaware and Tennessee. It may be served with process at
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`its corporate office address or c/o its registered agent, Corporation Service Company, 2908 Poston
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`Ave., Nashville, TN 37203-1312. Team Health Holdings, Inc. is the ultimate parent company for
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`the TeamHealth organization. Upon information and belief, Team Health Holdings, Inc. was
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`directly involved in promulgating and implementing the unlawful business policies and practices
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`alleged herein.
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`15.
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`Defendant Ameriteam Services, LLC (“Ameriteam”) is a Tennessee limited
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`liability company. Its sole member is Team Finance LLC, whose sole member is Team Health
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`Holdings, Inc. On information and belief, AmeriTeam employs executive officers of TeamHealth;
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`issues policies that govern all TeamHealth entities in conjunction with its ultimate parent, Team
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`Health Holdings, Inc.; and provides operational direction and administrative support to all
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`TeamHealth entities. Its principal place of business is at the 265 Brookview Centre Way address.
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`AmeriTeam is a citizen of Delaware and Tennessee. It may be served with process at its corporate
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`office address or c/o its registered agent, Corporation Service Company, 2908 Poston Ave.,
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`Nashville, TN 37203-1312.
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`16.
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`Defendant HCFS Health Care Financial Services, LLC is a Florida limited liability
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`company with a principal office situated in Knoxville, Tennessee. It may be served at its principal
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`office address at 265 Brookview Centre Way, Suite 400, ATTN: Legal Dept., Knoxville, TN
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`37919-4049; or via its registered agent, Corporation Service Company, 2626 Glenwood Avenue,
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`Suite 550, Raleigh NC 27608. On information and belief, the sole member of HCFS Health Care
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`Financial Services, LLC is Team Radiology, LLC, the sole member of Team Radiology, LLC is
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`Team Finance LLC, and the sole member of Team Finance LLC is Team Health Holdings, Inc.
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`HCFS Health Care Financial Services, LLC provides billing, coding, and collection services for
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`the TeamHealth enterprise, as well as for others.
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`17.
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`Defendant ACS Primary Care Physicians Louisiana PC is a business entity on
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`information and belief formed and organized under Louisiana law. It is an emergency medicine
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`provider. Its NPI Number is 1306889092. It has an office address at 211 4th Street, Alexandria,
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`LA 71301 and an office address at PO Box 634703, Cincinnati, OH 45263. Its provider tax ID
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`number is 62-1859672. This entity is ultimately owned by Team Health Holdings, Inc. It may be
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`served at its addresses above or c/o its registered agent, Corporation Service Company, 501
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`Louisiana Avenue, Baton Rouge, LA 70802.
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`18.
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`Defendants Team Health Holdings, Inc. and Ameriteam own and control the system
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`of affiliated entities operating as and collectively referred to herein as TeamHealth. TeamHealth
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`itself is owned by a large private equity firm, Blackstone, which acquired the enterprise in 2017
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`for $6.1 billion. TeamHealth among other things provides ED staffing and administrative services
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`to hospitals through a network of subsidiaries, affiliates, and independent contractors, which
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`operate in nearly all states and which Defendants refer to as the “TeamHealth System.”
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`19.
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`TeamHealth designed the complex structure of the TeamHealth System to
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`circumvent state laws that prohibit general business corporations from practicing medicine,
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`employing doctors, controlling doctors’ medical decisions, or splitting professional fees with
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`doctors, aka, the corporate practice of medicine.
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`20.
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`TeamHealth deploys numerous local subsidiaries and affiliates with varying names
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`intentionally to efface its own involvement in the relevant practices, as is further discussed below.
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`III.
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`JURISDICTION AND VENUE.
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`21.
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`This Court has diversity jurisdiction over this dispute pursuant to 28 U.S.C. § 1332
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`because this action is between citizens of different states and the amount in controversy for the
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`Plaintiff exceeds $75,000, exclusive of interest and costs, and under 28 U.S.C. § 1332(d) of the
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`Class Action Fairness Act (CAFA), because this is a class action in which at least one Plaintiff or
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`class member is a citizen of a different State than at least one Defendant and the classwide amount
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`in controversy is over $5,000,000.
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`22.
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`This Court also has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because
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`the claims arise under federal law, and under 18 U.S.C. § 1964(c) in that this action alleges
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`violations of RICO. This Court has supplemental jurisdiction over any state law claims pursuant
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`to 28 U.S.C. § 1367.
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`23.
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`This Court has personal jurisdiction over Defendants because they were located in
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`or conducted relevant business activities in the State of Tennessee during the pertinent times or
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`otherwise had such minimum contacts with the forum as to make it fair and reasonable for them
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`to be hauled into Court here. All named Defendants except for ACS Primary Care Physicians
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`Louisiana PC are also believed to do business specifically in Tennessee by staffing EDs in towns
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`including Union City, Tazewell, Sevierville, Livingston, Carthage, Winchester, Pulaski,
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`Lawrenceburg and Athens, Tennessee.
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`24.
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`Venue is proper pursuant to 28 U.S.C. § 1391(b) and (c) because a substantial part
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`of the events giving rise to this Complaint occurred in this District; and because the Defendants
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`transact business in this District, including doing business with emergency room departments and
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`hospitals in this District, and engaging in relevant coding and billing activities here.
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`IV. DETAILED FACTS.
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`a.
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`25.
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`Background on TeamHealth.
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`TeamHealth has entered into arrangements with numerous hospitals to replace local
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`ED practice groups with TeamHealth’s outsourced staff and attendant administrative, operational,
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`coding and billing infrastructure. TeamHealth staffs those emergency departments with ED
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`physicians, midlevel practitioners and other staff under contract with TeamHealth, and it bills
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`payors for the services these staffers provide.
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`26. Midlevel practitioners, also called non-physician practitioners or advanced clinical
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`practitioners (“ACPs”) are health care workers who have a defined scope of practice. They
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`pertinently can include physician assistants (“PAs”) and nurse practitioners (“NPs”). Midlevels
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`have training less than a physician but greater than a nurse or medical assistant.
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`27.
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`TeamHealth organizes groups of local personnel to staff hospitals using locally
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`formed business entities such as, here, ACS Primary Care Physicians Louisiana PC. This local,
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`small entity is reflected on paper as the employer of the TeamHealth-supplied ED staff at the
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`relevant hospital visited by enrollees of the Plaintiff’s plan. In fact, though, the higher-level
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`TeamHealth entities have domination and control over these local entities, such that the local
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`entities function as mere instrumentalities for purposes of assigning joint and several liability to
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`the parent entities.
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`28.
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`After TeamHealth’s healthcare contractors provide a service to a patient, an
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`administrative group at TeamHealth’s centralized corporate offices creates a health insurance
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`claim by converting the medical record of TeamHealth’s healthcare contractors into a health
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`insurance claim. TeamHealth sends the claim to applicable payors including insurers, third-party
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`administrators (“TPA”) of self-funded plans, CMS, or directly to the patient.
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`29.
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`Here, for the specific false claims and overbilling applicable to the named Plaintiff,
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`the applicable local TeamHealth entity was ACS Primary Care Physicians Louisiana PC, a
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`Louisiana-organized entity. The TeamHealth staffers consisted of physicians, ACPs and/or others
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`who were assigned to work in the emergency department of Rapides Regional Medical Center,
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`located at 211 4th Street, Alexandria, LA 71301.
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`30.
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`TeamHealth characterizes its healthcare staff as independent contractors. In reality,
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`under TeamHealth’s business model, they are on information and belief actually employees and
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`servants of TeamHealth, because notwithstanding any contract terms purporting to expressly
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`designate the physician or ACP as an independent contractor, in fact under the reality of the
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`TeamHealth relationship with its ED staff, TeamHealth closely supervises, controls and directs
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`some or all of those staff in a manner reflecting a relevant right to control.7
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`31.
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`The TeamHealth staff who treat the patient do not see the insurance claims that
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`TeamHealth creates, even though the claims are submitted in their names. Nor do they receive the
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`money that TeamHealth collects. Rather, TeamHealth has the money sent directly to TeamHealth.
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`Generally, TeamHealth pays doctors and physician’s assistants/midlevels a fixed hourly and/or
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`per patient or per transaction fee. Using this scheme, TeamHealth is able to keep most of the
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`money that its doctors and midlevels generate.
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`32.
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`Under the normal course of billing and payment, payors do not see the medical
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`records generated by TeamHealth’s healthcare staff. Instead, TeamHealth, on information and
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`belief working through its subsidiary HCFS Health Care Financial Services, LLC, generally only
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`sends medical billing codes and minimal other data, in electronic or hardcopy CMS-1500 form.
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`Payors typically accept the CPT codes as submitted and calibrate payments accordingly in a
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`process which is often heavily automated and merely administrative, with no independent
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`judgment exercised regarding whether the facially proper8 CPT code is in fact inflated. This
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`information asymmetry is ripe for fraud, and TeamHealth has exploited it.
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`7 E.g., Galloway v. Memphis Drum Service, 822 S.W.2d 584, 587 (Tenn. 1991) (finding on the
`facts before the court that degree of control was inconsistent with an independent contractor
`relationship, an independent contractor being one who undertakes to produce a given result without
`being in any way controlled as to the methods by which he attains that result) (citing cases).
`8 The CPT codes used by TeamHealth superficially appear to be facially proper, in the sense that
`there is a small group of CPT codes used for emergency services, and the codes selected by
`TeamHealth for its billing fall into that group. However, TeamHealth coders routinely select the
`wrong, inflated code out of that available code set.
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`33.
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`After TeamHealth convinces a hospital to “outsource” its ED to them, TeamHealth
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`acts as an intermediary or gatekeeper between its own (directly or indirectly employed or
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`contracted) healthcare workers, and the Medicare authorities, insurance companies and self-funded
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`plans that pay for their services. By acting as an intermediary, TeamHealth gets to bill for services
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`performed by its healthcare staff, but without any oversight.
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`34.
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`TeamHealth’s business model of being an intermediary between doctors and
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`insurance companies causes doctors to be paid less. TeamHealth requires that all payments be sent
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`directly to its corporate enterprise and keeps most of the payments. TeamHealth generally
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`compensates its healthcare staffers at a fixed hourly or transactional rate that does not vary with
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`the amount of excess payments TeamHealth extracts through its billing schemes.
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`35.
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`TeamHealth’s individual healthcare contractors and employees have no say in how
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`much TeamHealth bills for their services. TeamHealth is the controlling intermediary between its
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`healthcare staffers, on the one hand, and healthcare payors, and patients, on the other.
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`36.
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`TeamHealth has grown dramatically by acquiring other staffing/billing companies
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`focused on emergency services and other sectors. It has become one of the largest suppliers of
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`outsourced healthcare staffing and administrative services for hospitals and other healthcare
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`providers in the United States. TeamHealth operates nationwide, claiming to control hospital ER
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`departments in 47 states, and employs more than 18,000 individuals.
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`37.
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`Historically, many or most hospital EDs have operated at a loss. However,
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`TeamHealth’s business model has generated significant profits.
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`38. When sending bills or providing services, TeamHealth usually does not use its own
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`name or provider identification number (PIN); instead, it uses the names and PINs of its doctors
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`or one of its dozens of controlled entities who are the local affiliates, most of which do not carry
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`the TeamHealth name. Because TeamHealth uses many different entities and names to carry out
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`its billing scheme, it has been able to mask the enormity of its enterprise and the sheer number of
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`times it has carried out this scheme. Here, as noted, the local entity name that TeamHealth used
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`was ACS Primary Care Physicians Louisiana PC, which name TeamHealth used for billing in
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`addition to other provider names it used.
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`39.
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`TeamHealth structures its business operations to support its profit-maximizing
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`strategy while disguising its participation in the corporate practice of medicine. The corporate
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`practice of medicine doctrine prohibits corporations from practicing medicine or employing a
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`physician to provide professional medical services. This rule promotes doctors working for
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`themselves or with other doctors. It is intended to safeguard against the commercialization of the
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`practice of medicine which risks putting financial incentives above patient care.
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`40.
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`TeamHealth seeks to circumvent state laws banning the corporate practice of
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`medicine by creating and maintaining a large number of these local-entity subsidiaries with various
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`names. TeamHealth owns and operates a number of regional corporations, which in turn own these
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`subsidiaries that employ physicians as purported independent contractors. TeamHealth, the
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`corporation, thus avoids directly employing the doctors it controls.
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`41.
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`At its headquarters, TeamHealth handles all the medical coding and billing for work
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`performed by its staffers around the country and uses uniform procedures across the enterprise
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`designed to maximize revenue. It centrally controls its workforce nationwide by setting procedures
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`for their work, for when and how much they work, and for what they are paid. TeamHealth decides
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`what codes to assign and how much to bill for its personnel’s services. When TeamHealth’s
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`workers complete their work with a patient, they submit medical records to headquarters, where
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`TeamHealth engages in upcoding, overbilling, and aggressively collecting on its bills.
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`42. Medical coding is the process of converting a medical record into a billing code
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`that accurately describes the medical service provided. Billing codes are used by CMS and private
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`payors to pay for services. Standardized health care billing codes are called Current Procedural
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`Terminology or CPT codes. TeamHealth determines what CPT codes to bill and sends claims
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`containing these codes to payors when TeamHealth seeks payment for services.
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`43.
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`A central administrative group at TeamHealth’s corporate offices in Tennessee (on
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`information and belief, consisting of HCFS Health Care Financial Services, LLC) handles the
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`coding. They take the medical records generated by TeamHealth’s healthcare staffers and decide
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`what CPT code to bill for the work performed. After reviewing the medical record generated by
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`the TeamHealth medical team staffing the hospital ED in question, a TeamHealth “coder” assigns
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`the CPT codes. TeamHealth then submits the codes as a claim.
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`44.
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`TeamHealth’s coders are administrative employees hired and trained by
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`TeamHealth. They are not ED physicians and usually lack medical training. TeamHealth’s
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`doctors and midlevels do not see the codes selected by TeamHealth’s coders, nor do those front-
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`line workers see the insurance claim or billed amounts. They have no idea how TeamHealth bills
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`their services even though the bills often are submitted in their names for services they rendered.
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`The providers are not involved in assigning codes to the services they provide, and they are not
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`consulted regarding what codes should be billed.
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`45.
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`One of TeamHealth’s healthcare workers described the situation: “As an
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`emergency medicine physician, I have absolutely no idea to whom or how much is billed in my
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`name. I have no idea what is collected in my name. This is not what I signed up for and this isn’t
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`what most other ER docs signed up for. I went into medicine to lessen suffering, but as I understand
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`more clearly my role as an employee of TeamHealth, I realize that I’m unintentionally worsening
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`some patients’ suffering.”9
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`46. When seeking payment for services, TeamHealth may not provide actual medical
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`records. Instead, it makes a representation that the CPT codes accurately describe the service
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`provided by the TeamHealth unit at the hospital ED in question. When TeamHealth does not
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`include medical records showing what services were provided, a payor cannot compare the codes
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`on the claims to documentation regarding the services. Because of the large volume of claims
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`submitted and the laws prohibiting health insurance fraud, payors reasonably rely on TeamHealth’s
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`representations.
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`47.
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`In accordance with its usual practice, during the pertinent times, TeamHealth
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`submitted health insurance claims without including the underlying medical records, or otherwise
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`with Defendants taking steps to conceal the true nature of the overbilling and render it more
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`difficult to discern. Plaintiff and the class paid TeamHealth’s claims in reliance on TeamHealth’s
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`representations.
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`48.
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`TeamHealth relies on a simple calculus: that the effort it takes (one must hire a
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`coding expert to do it) to manually go through the claims for payment and weed out the 50% or
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`more10 with overbilling via inflated CPT codes is inefficient if not cost-prohibitive as a process of
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`9 See Isaac Arnsdorf, “How Rich Investors, Not Doctors, Profit From Marking Up ER Bills,”
`ProPublica, June 12, 2020, https://www.propublica.org/article/how-rich-investors-not-doctors-
`profit-from-marking-up-er-bills (last accessed March 16, 2022).
`10 Compare the United Healthcare case, in which the plaintiff alleged 60% of examined claims
`were overbilled. See United Healthcare complaint ¶ 8 (“The United Plaintiffs have reviewed tens
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`identifying and rectifying individual cases of the overbilling. However, large insurance company
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`payors have used their large cohort of claims to engage in statistical analysis and determine the
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`systematic nature of the overbilling. 11 And the federal government has performed a similar
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`analysis with r