The first pile-on lawsuit against Radiology Partners has arrived: UnitedHealth’s original 2023 lawsuit against RP for an alleged “pass-through billing scheme” wrapped up this fall, and Aetna just filed their own Christmas present on December 23.
For those curious about how that United lawsuit played out, here are my three posts covering that story:
- United against Radiology Partners
- United is Still Fighting Radiology Partners
- Counting Chickens: RP loses its windfall award from United
They provide a helpful backdrop of what’s happening now.
In the first part of its suit, Aetna alleges the same pass-through billing scheme:
In phase one of the scheme, Radiology Partners identified [its RP-owned practice] MBB as having the most lucrative in-network contracts with commercial payors in Florida, including Aetna, and began using MBB’s name and Tax Identification Number (“TIN”) to bill for services performed by all its “affiliated” Florida radiology groups. Radiology Partners’ use of MBB’s TIN to bill for services performed by other radiology groups misrepresented that MBB—as opposed to another radiology group with its own separate in-network contract—performed the services billed.
Lots of businesses merge or sell to do this legally (barring antitrust concerns).
The issue here is that RP wants to have it both ways. Each RP-owned practice retains its initial identity despite being functionally owned by RP. Part of this is to get around laws barring the corporate of medicine in some states. These groups maintain their original Tax ID and payor contracts while RP has operational control and its specified share of the profits. You don’t get to say each group is an individual “physician-owned” private practice on the one hand and then funnel all the billing through your best contracts as if every RP-owned practice was in fact one company. They’re either separate companies or they’re not.
By 2022, MBB was submitting significantly more claims to Aetna than it had historically because of Radiology Partners’ scheme. But when asked about this increase in claims volume, MBB deflected Aetna’s inquiries. Ultimately, Aetna terminated MBB’s in-network contract, causing MBB to go “out-of-network” with Aetna. The other radiology groups implicated by Radiology Partners’ scheme remained “in-network” with Aetna, however.
The cancellation of this contract seems like an important distinction with the United lawsuit. In that case, United unilaterally started paying RP under a different contract, which violated the terms of their original agreement dating back to 1998. So when the arbitration panel told both parties to just go away, they stated both parties got nothing because of their “breaches of the 1998 Agreement” and “other acts and omissions.” We’ll have to see what RP’s rebuttal will be, but it’s not clear here that Aetna made the same mistake as United of violating their contract. In the United case, the panel didn’t go into details but didn’t seem to like RP’s behavior (e.g. those breaches, acts, and omissions resulted in the panel vacating an almost $100 million interim award). If Aetna didn’t make a mistake, then presumably RP’s similar behavior here standing alone is less likely to result in just another mulligan.
But that canceled contract led to the second part of the claim, which is an equally egregious-sounding scheme of abusing the independent dispute resolution (“IDR”) process used to adjudicate out-of-network claims:
As an out-of-network radiology provider, MBB’s claims were now subject to the No Surprises Act (“NSA”), 42 U.S.C. §§ 300gg-111, which is intended to protect patients from surprise medical bills when, for example, they unwittingly receive services from out-of-network providers (such as MBB) at in-network hospitals. The NSA does not apply to in-network providers.
Rather than properly bill the services provided by Radiology Partners’ other radiology practices through those groups’ existing contracts with Aetna, the Defendants continued to bill all services through MBB, using MBB’s TIN. This, too, was a material misrepresentation that caused Aetna to pay MBB funds to which it was not entitled.
Defendants wanted to take even more from Aetna and its plan sponsors. To do so, Defendants initiated tens of thousands of arbitrations under the No Surprises Act’s independent dispute resolution (“IDR”) process for services that were provided by the Radiology Partners-controlled medical groups that had—and still have—in-network contracts with Aetna. These arbitrations were all initiated based on Defendants’ misrepresentations that they were for medical services provided by MBB. In truth, they were for medical services provided by other medical groups who had contracts with Aetna, rendering those services ineligible for arbitration under the NSA.
Now, MBB itself should have been using the IDR. That’s how it’s supposed to work, and if they still made great money via that process, so be it. The Brookings paper below suggests that the outcome of IDR being higher than typical market rates has been pretty common so far. What’s hard to imagine is what plausible argument RP has for submitting claims for work performed by its other Florida radiologists through the IDR process when those other groups had contracts in force.
If you’re employed by group X and working for group X and group X has a contract with Aetna, I don’t see how you pretend you’re out of network and bill through group Y, which does not employ you. If someone with billing expertise wants to weigh in, I’m very curious. The answer will probably help inform how many more of these lawsuits we should expect to see.
As Aetna (and others) point out:
As scholars studying NSA IDR data recently noticed, Radiology Partners and three other private-equity-backed provider groups have accounted for “a large and disproportionate share of IDR cases.” In fact, Radiology Partners is responsible for over 90% of all IDR cases involving claims for professional radiology services.
The referenced work is “A first look at outcomes under the No Surprises Act arbitration process” from Brookings, which noted that four companies (TeamHealth, SCP Health, Envision, and Radiology Partners) generated 74% of the studied IDR claims. RP is apparently responsible for over 90% of radiology claims despite a market share of probably no more than 10%.
For those who aren’t very familiar with this part of the No Surprises Act, the paper breaks down the process well. To be clear, the NSA is a great example of well-intentioned but totally broken legislation, and the IDR process is a mess.
When you see a news story that a handful of private equity companies are responsible for the vast majority of IDR claims, it makes you wonder: Is it just because they bought the groups with the best contracts and therefore those most likely to be dropped by insurers in the aftermath of the NSA? Is it because their practice-consolidation approach results in higher costs that the payors are unwilling to pay leading to these subsequent reimbursement fights? Are they just better at playing the game and going after the unscrupulous payors? Or–as the case may be here–are we looking at a combination of likely all of these things plus potentially/allegedly a bunch of fraud, bypassing in-force contracts to funnel unrelated work through the arbitration process in bulk in order to hide what should be lower-paying work? What a mess.
Ultimately, this is another emotionally unfulfilling conflict. Aetna is not a “good guy” here. There are no good guys. The No Surprises Act means that an insurance company has the option to drop a high-paying legacy contract and force a group to go out of network as a negotiating tactic to renegotiate rates and push reimbursement down. The Brookings’ analysis suggesting that recent IDR awards have so far trended toward the higher pre-NSA out-of-network surprise bills and not the lower dubiously-defined qualifying payment amount (QPA) doesn’t change the fact that the payors have been using it as a bullying tool in their arsenal to pay less. That RP may have deserved it here is only part of a much larger depressing story.
One imagines Aetna has learned from recent events and likes its chances.
One also wonders how many more payors in how many more states might be polishing up additional suits for 2025.