United is Still Fighting Radiology Partners

As you might recall, UnitedHealthcare sued Radiology Partners in April 2023 for an alleged pass-through billing scheme during an ongoing arbitration process about underpayment initiated by RP’s subsidiary group Singleton Associates in April 2022. RP called shenanigans. The judge made them fold that complaint into the ongoing arbitration process, in which there are currently three phases:

• Phase I: Determine which contract is active and should be used to determine charges: the original very lucrative 1998 one vs the 2020 one United started using (basically unilaterally)
• Phase II: If applicable, determine damages from Phase I
• Phase III: Evaluate the billing fraud accusation, which will be treated as a separate question from Phase I.

Last fall, RP won an interim award from the initial phase of that process to the tune of $153 million. United’s statement at the time: “We do not agree that Singleton will recover an award from UnitedHealthcare.”

In October, RP then quicky filed an application hoping to treat the “interim” award as a “final” award and get that money ASAP. United filed their own application to “vacate” that “interim arbitration award” (if you’re curious, the actual filing is linked from that page).

Their stated reason? Among other things, the arbitration panel might be vacating its own award itself. Err…what?

Arbitrators Must be Impartial

The short of it is that arbitration–a way of settling disputes outside of court–is supposed to be conducted by an impartial unbiased independent third-party arbitrator. The dispute here is between the dueling claims made between RP via its Singleton subsidiary group and UnitedHealthcare, the notorious evil insurance giant. And while RP won the first part of the deliberative process, unfortunately for them, the panel didn’t appear very impartial or unbiased: three of its members have been disqualified and replaced, including most recently the panel’s chairwoman who ran the show.

(United also claims that Singleton didn’t share–and the panel didn’t require–emails that acknowledged a key part of the case, namely the knowledge/acknowledgment of the newer less lucrative contract. Under the subsequent panel shuffling, that also doesn’t look so hot.)

That now-former panel chair previously ran for public office on a platform that included “reigning in” insurance companies (and didn’t disclose it). She’s also been reposting and liking anti-insurance tweets and things of that nature on social media. (Tweets? Ugh, this is the world we live in.)

Of course, like most humans, I agree with the chair’s position that United sucks and that the insurance industry needs to be reined in. I have yet to see vertical integration in healthcare do anything other than increase consumer prices and generate hegemonic profits. But I am not an independent arbitrator.

To be fair, I’m sure it’s very hard to find people who don’t hate insurance companies, and I’m not sure how easy it is to be a truly unbiased arbiter in the real world given that people, you know, read the news and stuff. But one can at least avoid obvious public statements and disqualifying public positions. You can’t be a social media warrior on the topic you’re arbitrating.

What a mess. Again, United is generally despicable, but it’s hard not to buy their argument that there needs to be a mulligan for the arbitration process. This doesn’t mean the outcome of the initial phase was wrong; it was just shoddy.

Let’s discuss that three-part arbitration process a bit more:

Phase I: Which Contract?

As we discussed in the initial lawsuit post, Singleton enjoys vs. enjoyed a very lucrative contract dating way back to 1998. United has recently been paying them via a much less lucrative 2020 contract. Where did that new contract come from?

What United did to get that 2020 contract was basically send a Docusign phishing scam opportunistically to doctors that included a new contract buried inside with the hope that one would be careless enough to sign it thinking it was typical nonsense credentialing paperwork and not a new contract. Super shady.

The arbitration panel didn’t accept this bullshit maneuver (which may have more to do with the fine print of the initial contract and less about how philosophically crappy it was), and that conclusion may not change in the future. We shouldn’t be surprised if RP wins Phase I again regardless of how much of the process is repeated (as it stands, it sounds like for now the new panel will be reviewing the written records and not starting from scratch and repeating live testimony).

Phase II: The Damages

Assuming Phase I holds up, the amount of damages is also hard to pin down. United alleges that the formula used to determine damages was changed at the last second by RP without the chance to argue or validate it. The change, according to United, increased the award to the tune of ~$50 million. Assuming RP wins Phase I a second time, it’s not clear where within the wide range from $0-153 million that interim award would fall.

Phase III: The Fraud?

Keep in mind that all of that is still only regarding the initial phase’s interim judgment. Neither the original panel nor its successor has addressed United’s counterclaim of billing fraud, which could potentially wipe out an interim reward should any part of it stand.

This is a big unknown.

RP obviously isn’t going to get paid at the higher Singleton rate for cases inappropriately billed through that contract if that’s what the panel determines. I would argue that it’s the outcome of Phase III that could really send out the shockwaves.

The Conclusion

None–I won’t pretend to have a prediction as to the ultimate outcome of this arbitration process. This is just an update.

All this drama really just suggests to me that this process isn’t over, that it could easily take several months longer just to get Phases I and II complete again, and that the odds of RP seeing a dime until Phase III is complete are very low.

RP is hurting for cash and has been desperately trying to both raise equity and refinance their debts in order to pay the bills this year. They may even be successful in that regard (see this subsequent post for an analysis of the planned restructuring). Their October filing was an attempt to treat that interim award as a final award and get the money as soon as possible. $153 million is real money, and it would make a meaningful impact on their cash flow. I don’t think that’s going to happen. Even if they’re doomed to lose, I suspect United will drag this out as long as possible.

Unfortunately, the appendix, which includes some presumably juicy exhibits, has been sealed based on the mutual request of both parties. Neither one is interested in the public knowing too much about their business practices.