UnitedHealthcare owes Radiology Partners affiliate $153.5M in underpayment dispute, arbitration panel rules
UnitedHealthcare owes a Radiology Partners-affiliated practice more than $153.5 million in their long-running payment dispute, an independent arbitration panel has confirmed.
Singleton Associates first filed the arbitration demand in April 2022, claiming “significant underpayments” by UnitedHealthcare of Texas, according to court documents. The Houston, Texas, imaging group previously estimated that UHC had caused over $100 million in damages by breaching their agreement and systematically underpaying physicians.
Separately, in late September, a California judge ruled that RP and UHC must settle their disagreement via arbitration, rather than a lengthy jury trial. That’s because the lawsuit UnitedHealthcare filed against RP in April largely mirrored existing claims in the Texas-based dispute between the parties.
Following two phases of discovery, hearings and a briefing, an arbitration panel has now preliminarily ruled in Singleton Associate's favor, granting the sizable award. Singleton filed a motion on Oct. 13 asking a Harris County Texas judge to affirm the arbitration award into a judgement. The motion represents another step in the process, with UnitedHealthcare anticipated to oppose the motion in court.
“At this time, we are not providing additional comments to what was provided in the Oct. 13 motion,” a Rad Partners spokesperson said when reached by Radiology Business Wednesday.
The preliminary award includes $134.3 million in underpayment damages, $9 million in prejudgment interest, nearly $8 million more tied to “Texas prompt pay” requirements, and $2.2 million in attorney fees.
UnitedHealthcare did not immediately respond to a Radiology Business request for comment Wednesday. However, in a statement shared with Bloomberg Law, the insurance giant labeled the nine-figure payout as an “interim award, not yet final and subject to legal proceedings.” Counterclaims it holds against RP and affiliate practice Singleton Associates could blunt the damages.
“We do not agree that Singleton will recover an award from UnitedHealthcare,” the Minnetonka, Minnesota, company said.
UnitedHealthcare’s California-based claim alleged that RP perpetrated a “pass through billing scheme” in an “unscrupulous pursuit of profits.” The purported arrangement involved RP identifying affiliated practices with higher negotiated rates and then using radiologists from other parts of the company to bill through such practices and earn the heftier amount. This allegedly resulted in UHC paying tens of millions of dollars in reimbursements to which the insurer believes RP and its affiliates were not entitled.
Rad Partners has faced challenges in recent months, with S&P Global Ratings downgrading its credit in June amid worries RP’s capital structure could become unsustainable. Bloomberg Law reported the same month that the company was seeking new investors to help repay more than $2 billion in debt. In its Wednesday update, the outlet claimed RP shared news of the possible forthcoming cash infusion with lenders. Its $1.6 billion first-lien term loan (due in 2025) had inched up to 76 cents on the dollar Wednesday, from $0.72625 last week, Bloomberg estimated. Rad Partners also has reportedly told lenders it anticipates collecting “new preferred equity” from venture capital firm and current investor New Enterprise Associates, sources told the outlet.
Former DaVita executive Rich Whitney, MBA, co-founded Rad Partners in 2012. It is supported by private equity firm Whistler Capital (31.6% ownership stake as of November 2022)—alongside New Enterprise Associates (19.6%) and the Australian sovereign wealth Future Fund (10%). RP currently employs 3,600-plus physicians, working at 138 centers across 35 states and handling 52 million cases per year.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.