Radiology provider Envision Healthcare scores $91M judgment against UnitedHealthcare

Radiology provider Envision Healthcare has scored a $91,270,257 judgment against the nation’s largest commercial insurer, the company announced Tuesday morning.

The Nashville-based multispecialty group first sued UnitedHealthcare in 2018, challenging the powerful industry giant’s billing practices. But the suit disappeared from public view, moving from federal court to a “secretive” arbitration panel, the Financial Times reported late Monday, May 1.

In a ruling reached earlier this year but never made public, arbitrators determined UnitedHealthcare breached its contract with Envision by “unilaterally reducing reimbursement rates.” The insurer now must pay tens of millions in damages, according to a redacted copy of the ruling first obtained by the Times.

“While [we] are very pleased with the outcome, it should not take five years to get paid for the lifesaving care our clinicians provide” Jim Rechtin, MBA, president and chief executive of Envision, said in a statement. “We currently have three other lawsuits against UnitedHealthcare, which will likely take several more years to resolve. It is challenging to create a stable environment for our teams when health plans choose not to pay their bills.”

UnitedHealthcare said it disagrees with the outcome while noting that arbitrators have previously denied other claims from the physician services firm. The ruling pertained to matters when Envision was still participating in UHC’s network and is unrelated to additional litigation arising after the insurer cut the company from its health plans at the end of 2020.

“We disagree with the panel’s decision,” a UnitedHealthcare spokesperson said in a statement shared with Radiology Business. “However, it did reject many of Envision’s claims, including damages it was seeking. We remain committed to helping contain rapidly rising healthcare costs for the people and employer customers we’re privileged to serve.”

“We’ll continue efforts to protect our members and customers from the small number of bad actors—often private equity-backed physician staffing companies like Envision—who demand unreasonable and anticompetitive rates for their services and drive up the cost of care for everyone,” the spokesperson added.

UnitedHealthcare countersued Envision last year and also took imaging industry giant Radiology Partners to court last month, alleging it perpetrated a pass-through billing scheme, also criticizing the company’s private equity owners.

The victory comes at a perilous time for Envision after recently missing a debt payment. Leaders are exploring chapter 11 as the firm grapples with a heavy debt load and other headwinds, the Wall Street Journal reported. Private equity firm KKR previously acquired Envision, saddling it with debt as part of a $9.9 billion leveraged buyout.

Envision currently employs some 17,000 physicians primarily in emergency and hospitalist medicine, anesthesiology and neonatology. The tally also includes more than 500 radiologists, a spokesperson said, down from 900 previously cited on its website (the representative did not respond to a follow-up query on why the number changed). Its physicians completed roughly 8 million radiology reads last year, according to its 2022 Clinical Impact Report, released April 27.

Rechtin believes the ruling sets a “critical precedent for insurers” to “pay in full” for care their health plan members receive.

“While we are disappointed that we had to take the step of entering into arbitration to compel UnitedHealthcare to pay its bills, we are satisfied with the panel’s decision against UnitedHealthcare and its systematic underpayment to clinicians for the care they provide,” he added.

UHC is part of the larger UnitedHealth Group organization, which is based in Minnetonka, Minnesota. One of the largest healthcare corporations in the U.S., UnitedHealth reported revenues of $324.2 billion last year, a 13% year-over-year uptick with double-digit growth in its UHC insurance segment. Earnings from operations were about $28.4 billion, with a 6.2% net margin, according to the company’s year-end earnings announcement.

Editor’s note: This story has been updated to include additional context and comments from UHC and Envision.