Judge denies Radiology Partners’ initial request to resolve ‘bogus’ UnitedHealthcare lawsuit via arbitration

A judge has denied Radiology Partners’ initial request to resolve its legal fight with UnitedHealthcare via arbitration.

The El Segundo, California-based practice filed the motion on Aug. 2, contending that the court dispute initiated by UHC in April largely mirrors an ongoing payment disagreement between the two parties. Rad Partners had sought a speedy resolution via arbitration, rather than a drawn-out court case.

Affiliated practice Singleton Associates originally filed its arbitration demand in April 2022, claiming “significant underpayments” by UnitedHealthcare of Texas, according to court documents. The Houston, Texas, imaging group estimates that the nation’s largest commercial health insurer has caused more than $100 million in damages by breaching their agreement and systematically underpaying physicians.

“The arbitration likely will make the complaint a nullity,” RP attorneys wrote in the motion. “If anything were to be left of these bogus allegations after the arbitration concludes, the court can take it up at that time.”

However, less than two hours after the filing, UnitedHealthcare attorneys submitted an amended complaint. Given the development, California district court Judge Michael W. Fitzgerald denied Rad Partners’ request to compel arbitration, asking the practice to refile based on the new document, setting an Aug. 24 deadline.

UHC and its attorneys did not immediately respond to a Radiology Business request for comment on the filing. The document appears to be substantively the same as the original lawsuit, claiming that Rad Partners had perpetrated a “pass through billing scheme.” This allegedly resulted in UHC paying tens of millions of dollars in reimbursements to which RP and Singleton Associates were not entitled. In one notable change, the amended complaint lists the larger UnitedHealthcare Services as the plaintiff, removing its Texas affiliate.

“United has discovered that several Radiology Partners affiliated radiology groups have systematically billed for services that they did not perform,” is one line that was not in the initial complaint. “The reason that Radiology Partners engaged in this fraudulent billing behavior is pure greed—for itself, for its private-equity backers, and to cover the mounting debt from its rapid acquisition campaign.”

According to UHC, Rad Partners would allegedly pinpoint affiliated practices with higher negotiated rates and then use radiologists from other parts of the company to bill through such practices to earn the heftier amount. UnitedHealthcare attorneys named other entities who allegedly took part in the scheme, which were not listed in the original complaint. Those include Mori, Bean & Brooks PA in Jacksonville, Florida, and Greensboro Radiology in Charlotte, North Carolina.

Rad Partners issued a statement in response to the new complaint, noting that its Texas payment dispute is currently in private arbitration, limiting what it can say publicly about the matter.

“The claims in the original and amended California complaints regarding RP billing practices are without merit and are typical intimidation tactics UHC is known to employ publicly against providers when UHC is challenged on reimbursement behavior and underpayments,” the company said in a statement shared with Radiology Business on Aug. 6. “Our motion in the California matter outlines UHC’s egregious conduct, intimidation tactics and ongoing attempt to delay and disrupt the conclusion of the current arbitration process,” the company added later. “We maintain the complaint is without merit, and we stand by the integrity of RP and our affiliated practices.” 

RP’s claims come after fellow private equity-backed radiology provider Envision Healthcare recently scored a win over UHC. Arbitrators determined UnitedHealthcare breached its contract with Envision by “unilaterally reducing reimbursement rates,” ordering the insurer to pay a $91 million judgment to the Nashville-based multispecialty group.

The Department of Labor also sued a third-party administrator owned by UnitedHealth on July 31, alleging it improperly denied claims for emergency services.