The largest commercial payer in the U.S. has sued Radiology Partners, claiming the imaging industry giant has perpetrated a “pass through billing scheme” in its “unscrupulous pursuit of profits.”
UnitedHealthcare first filed the claim on Friday, April 14, in a California district court. UHC and its local affiliate, UnitedHealthcare of Texas, allege that as early as 2014, Rad Partners engaged in a “classic form of healthcare fraud” by billing for services that its radiologists never performed.
For its part, RP blasted the lawsuit on Tuesday, saying it’s an obvious smokescreen.
“The claims in the United Healthcare complaint are without merit,” Radiology Partners said in a statement. “We believe UHC’s complaint represents an obvious attempt to delay or disrupt the conclusion of an underpayment dispute currently in arbitration involving a Texas-based RP-affiliated practice. We stand by the integrity of RP and our affiliated practices.”
In the complaint, UHC alleges that Rad Partners acted in concert with its medical groups to deliberately cause “thousands of claims” to be improperly billed to the insurer. They would allegedly do so under network contracts, “even though the in-network provider did not perform the underlying services being billed.”
UnitedHealthcare gave the example of Singleton Associates, a small practice in Houston, that was contracted with two local hospitals. The group allegedly obtained “particularly high reimbursement rates” from UHC via a contract first executed in 1998. The agreement allegedly said Singleton could only bill for services performed by “medical group physicians” who were “shareholders, partners or employees.” And it could not assign those rights to other docs without first notifying the payer.
For years, the practice abided by the agreement, UHC said, until it became part of the bigger group.
“Once Singleton was controlled by Radiology Partners, Radiology Partners caused Singleton to breach the agreement by submitting claims for services performed by providers who were not shareholders, partners, or employees of Singleton and who were not performing services at hospitals where Singleton was contracted. Likewise, Radiology Partners caused Singleton to fraudulently bill United for services performed on individuals who were not Singleton’s patients.”
The payer claims Rad Partners deceived the company by submitting claims for radiology services performed by “unauthorized providers, many of whom were located outside of Houston and in some cases, even outside of Texas.”
“The sole purpose of the pass-through billing was to maximize Radiology Partners’ profits for services performed by their affiliated medical groups."
And the scheme allegedly grew over time. Prior to the provider groups coming together, Singleton had 70 unique providers billing for services under the agreement. But that number allegedly increased to more than 150 in 2017, then 315 by 2018, more than 500 unique providers in 2019, and 1,000 by last year.
“Radiology Partners’ interference with Singleton’s contracts with United and its conspiracy to defraud United has resulted in United paying tens of millions of dollars in reimbursements to which Radiology Partners and Singleton were not entitled,” the suit alleges. “All of this was done so that Radiology Partners’ private equity investors could reap extraordinary profits.”
The complaint points to two other “notable” radiology practices it claims took part in this alleged scheme. Those include teleradiology giant vRad and Synergy Radiology Associates of Houston, both acquired when Rad Partners bought Mednax’s radiology assets in 2020.
In its 10-count complaint, UnitedHealthcare is seeking damages in excess of $75,000. Those would include any damages from the alleged billing scheme (to be determined at trial), costs tied to the suit and any attorneys’ fees.
This is a developing story. Radiology Business will have further details.
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.