Arbitrators settle Radiology Partners-UnitedHealthcare dispute, vacating $134M award to RP

An arbitration panel recently settled the long-running payment dispute between Radiology Partners and UnitedHealthcare, vacating a $134,327,505 judgment previously awarded to RP. 

The case dates to April 2022 when Rad Partners affiliate Singleton Associates PA filed an arbitration demand claiming “significant underpayment” by UHC of Texas. UnitedHealthcare later sued the country’s largest radiology group in April 2023, alleging it had perpetrated a “pass through billing scheme” in its “unscrupulous pursuit of profits.”

Separate from that court case, in September 2023, 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 Rad Partners largely mirrored existing claims in the Texas-based dispute between the parties. 

The three-member panel finally reached a decision Aug. 7, with neither side entitled to a settlement. El Segundo, California-based Rad Partners—which employed over 3,600 physicians, servicing facilities in 50 states at last count—commented on the decision Thursday. 

“While the result was surprising and unsatisfying, we are nevertheless pleased that the panel rejected any recovery to UHC on its allegations regarding our affiliated practice,” Radiology Partners said in a statement issued Sept. 5. “We stand by the integrity of RP and our affiliated practices, and we are proud of the high-quality radiology services our physicians provide to Texas patients, including UHC members, and will always strive to achieve and protect reasonable reimbursement for physicians that supports the care patients deserve.”

UnitedHealthcare declined to comment when reached by Radiology Business. RP asserted that, with the Texas arbitration matter concluding, “there’s no reason for the California complaint to remain on the court’s docket.” The practice recently filed a motion to dismiss the 2023 lawsuit in a federal court. 

Rad Partners’ original arbitration demand had sought over $100 million, alleging UnitedHealthcare had systematically underpaid its physicians. Meanwhile, UHC’s complaint charged that RP would identify 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. Along with Singleton Associates PA, those included Mori, Bean & Brooks PA in Jacksonville, Florida, and Greensboro Radiology in Charlotte, North Carolina. The alleged scheme had resulted in UHC paying tens of millions of dollars in reimbursements to which the insurer believed that RP and its affiliates were not entitled.

The arbitration process spanned three phases including (1) testimony regarding which contract controlled the RP-UHC relationship, (2) whether Singleton had been paid all amounts due, and (3) UHC’s and any other counterclaims. Last fall, arbitrators had preliminarily awarded Rad Partners $153.5 million, Radiology Business reported previously. The amount included $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. 

However, amid multiple membership changes on the arbitration panel over the course of a year, the group decided to vacate the award, with neither party entitled to recovering anything from the other. The panel had most recently calculated that UnitedHealthcare owed Rad Partners nearly $94.3 million in underpayments but claimed RP was not owed the amount due to alleged violations of their contract.

“Because of its breaches of the 1998 agreement and its other acts and omissions, Singleton is not entitled to recover this difference and underpayment or any other relief against United,” the decision states. “Because of its breaches of the 1998 agreement and its other acts and omissions, United is not entitled to any other relief against Singleton. The panel determines that the evidence fully supports these decisions at law and in equity.”

Fees for the American Arbitration Association totaled $72,300 stemming from the dispute, along with nearly $1.4 million more in arbitrator fees and expenses.