Fla. Emergency Physicians Kang & Assocs. v. United Healthcare of Fla., Inc.

• Decision Date: 16 March 2021
• Docket Number: CASE NO. 20-60757-CIV-DIMITROULEAS
• Citation: 526 F.Supp.3d 1282
• Parties: FLORIDA EMERGENCY PHYSICIANS KANG & ASSOCIATES, M.D., INC., et al., Plaintiffs, v. UNITED HEALTHCARE OF FLORIDA, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Florida

526 F.Supp.3d 1282

FLORIDA EMERGENCY PHYSICIANS KANG & ASSOCIATES, M.D., INC., et al., Plaintiffs,

v.UNITED HEALTHCARE OF FLORIDA, INC., et al., Defendants.

CASE NO. 20-60757-CIV-DIMITROULEAS

United States District Court, S.D. Florida.

Signed March 16, 2021

Alan David Lash, Justin C. Fineberg, Michael Lee Ehren, Nicholas Andrew Ortiz, Lash & Goldberg LLP, Miami, FL, Jonathan Eric Siegelaub, Lash, Goldberg LLP, Fort Lauderdale, FL, for Plaintiffs.

Irene Bassel Frick, Akerman Senterfitt, Tampa, FL, Amanda L. Genovese, Pro Hac Vice, O'Melveny & Myers LLP, New York, NY, K. Lee Blalack, II, Pro Hac Vice, Kevin D. Feder, Pro Hac Vice, O'Melveny & Myers, LLP, Washington, DC, Natasha S. Fedder, Pro Hac Vice, O'Melveny & Myers LLP, Los Angeles, CA, Gera R. Peoples, Akerman LLP, Miami, FL, for Defendants United Healtchare of Florida, Inc., UnitedHealthcare Insurance Co.

Gera R. Peoples, Akerman LLP, Miami, FL, for Defendant UMR, Inc.

Bret Michael Feldman, Phelps Dunbar LLP, Tampa, FL, Craig L. Caesar, Pro Hac Vice, Phelps Dunbar LLP, New Orleans, LA, Errol J. King, Jr., Pro Hac Vice, Katherine C. Mannino, Pro Hac Vice, Phelps Dunbar LLP, Baton Rouge, LA, for Defendant Multiplan, Inc.

OMNIBUS ORDER ON MOTIONS TO DISMISS

WILLIAM P. DIMITROULEAS, United States District Judge

THIS CAUSE is before the Court upon Defendant Multiplan, Inc.’s Motion to Dismiss Plaintiff's Amended Complaint [DE 38] (the "Multiplan Motion") and United Defendants’ Motion to Dismiss Plaintiff's Amended Complaint [DE 39] (the "United Defendants Motion"). The Court has considered the Multiplan Motion and the United Defendants Motion, Plaintiff's Omnibus Memorandum of Law in Opposition [DE 48], Defendants’ Replies thereto [DE 52, 53], and the Notices of Supplemental Authority [DE 57, 60, 66] and the Responses thereto [DE 58, 63, 67]. The Court is otherwise fully advised in the premises.

I. BACKGROUND

On June 9, 2020, Plaintiffs Florida Emergency Physicians Kang & Associates, M.D., Inc., InPhynet Contracting Services, LLC, InPhynet South Broward, LLC, Paragon Contracting Services, LLC, Paragon Emergency Services, LLC, Southwest Florida Emergency Management, LLC, and Emergency Services of Zephyrhills, P.A. (collectively "Plaintiffs") filed an Amended Complaint against Defendants United Healthcare of Florida, Inc. ("United HMO"); UnitedHealthcare Insurance Co.("United PPO"); UMR, Inc. ("UMR"); (collectively "United") and MultiPlan, Inc.("MultiPlan") (collectively, "Defendants") bringing series of claims arising out of an allegedly fraudulent scheme to deprive Plaintiffs of full payment for emergency care Plaintiff rendered to patients in Florida insured by United or an employer-funded health plan for which United serves as a third-party administrator ("United Members"). Amended Complaint [DE 27] (hereinafter "AC").

Plaintiffs are out-of-network providers who, without any written contract with United that established rates of reimbursement, rendered emergency medical services to United Members. AC ¶¶ 1, 2. According to Plaintiffs’, United was obligated under Florida Statutes § 641.513(5) and § 627.64194 to reimburse Plaintiffs for the emergency services they provided at their billed rates or the usual and customary rate for Plaintiffs’ services but has failed to do so. AC ¶¶ 2, 3. Rather, Plaintiffs allege that United and Multiplan conspired to manipulate and depress the usual or customary reimbursement rate at which United reimbursed Plaintiffs. AC ¶¶ 3.

In their complaint, Plaintiffs lay out a scheme whereby United and MultiPlan would conspire to "cloak" inadequate reimbursement rates as objective and reasonable estimations of usual and customary reimbursement rates. AC ¶ 4. MultiPlan supplies United with usual and customary reimbursement rates through MultiPlan's Data iSight service. AC ¶ 4. United then relies on these calculations, which it represents as objective and fact-based, to determine the rate at which to reimburse Plaintiffs. AC ¶ 4. According to Plaintiff, however, United directs MultiPlan to "suggest" the rates provided by the Data iSight service. AC ¶ 4. Plaintiff characterizes MultiPlan as a "willing conduit through which United endeavors to lauder its deficient reimbursements." AC ¶ 3. The Defendants conceal their scheme, according to Plaintiff, through false statements on MultiPlan's website, Data iSight's website and United's and Data iSight's communications with providers including the Plaintiff physicians. AC ¶ 99.

These false statements include claims that Data iSight will provide transparency to providers allowing them to understand how the rates are calculated. AC ¶¶ 101, 102. Plaintiffs Amended Complaint sets forth allegations describing some Plaintiff physicians’ struggle to understand the basis for the rates they are being paid, including reimbursements for claims at rates that have drastically decreased over the past eight (8) months. AC ¶ 105. The Explanation of Benefit forms provided to non-participating providers for claims processed by Data iSight directed providers to call a toll-free number with any questions about the claim. AC ¶ 107. After repeated contact with Data iSight about two claims which Plaintiff physicians and their affiliates thought were underpaid, Plaintiffs’ affiliates did not receive an explanation of the payment amounts but did receive an increased reimbursement rate. AC ¶¶ 108-120.

Plaintiff also claims the Defendants fraudulently claim on Data iSight's website that the service sets reimbursement rates in a "defensible, market tested" way. AC ¶ 124. Plaintiff alleges that the following false statements have been made by Defendants:

• Data iSight's website states that its reimbursement rates are "calculated using paid claims data from millions of claims .... The Data iSight reimbursement calculation is based upon standard relative value units where applicable for each CPT/HCPCS code, multiplied by a conversion factor." AC ¶ 128.

• MultiPlan describes Data iSight's process as using "cost-and reimbursement-based methodologies" and asserts that it has been "[v]alidated by statisticians as effective and fair." AC ¶ 129.

• United states in the EOBs provided for claims processed with Data iSight "[United]uses a service called Data iSight to review select out-of-network claims and recommend a reduced payment amount for out-of-network covered services...." AC ¶ 126.

• United's EOBs contain a note stating: "Calculated using Data iSight, which utilizes cost data if available (facilities) or paid data (professionals)." AC ¶ 125.

Plaintiffs allege that these statements are meant to convey a false sense that Data iSight's suggested reimbursement rates are fair and based on objective data. AC ¶¶ 127, 130. Rather, Plaintiffs allege, MultiPlan has been directed to determine certain rates using the Data iSight tool and is financially incentivizes to generate rates that are as low as possible. AC ¶¶ 131, 132.

Plaintiffs also allege that Data iSight and MultiPlan have made false statements contending that Data iSight's suggested rates are adjusted based on a provider's geographic location. AC ¶¶ 140–143. Data iSight, according to Plaintiffs, claim that "[a]ll reimbursements are adjusted based on your geographic location and the prevailing labor costs for your area," and MultiPlan has stated that "[c]laims are first edited, and then priced using widely-recognized, AMA created Relative Value Units (RVU), to take the value and work effort into account [and] CMS Geographic Practice Cost Index, to adjust for regional differences ... [then] Data iSight multiplies the geographically-adjusted RVU for each procedure by a median based conversion factor to determine the reimbursement amount." AC ¶¶ 141, 142. Contrary to Data iSight and MultiPlan's claims, Plaintiffs allege that claims from providers affiliated with Plaintiffs in different geographic locations demonstrate that such geographic adjustments are not made to Data iSight's proposed rates. AC ¶¶ 143–152.

Defendants coordinated and carried out these false statements via wire communications. AC ¶ 155. Multiplan used interstate wires to post on its websites and Data iSight's website to convey the false claims outlined in Plaintiff's Complaint. AC ¶ 156. Data iSight communicated to affiliates of the Plaintiff physicians that it could not provide a basis for the rates it suggested, contrary to its prior statements about transparency. AC ¶ 157. Further, according to Plaintiff's allegations, since October 2019, Defendants furthered their fraudulent scheme by communicating payments amounts and making payments to physicians via the United States Postal Service and interstate wires. AC ¶ 160.

Based on these allegations Plaintiffs bring the following claims: Count I, Violation of RICO, 18 U.S.C. § 1962(c), against all Defendants; Count II, Violation of RICO conspiracy, 18 U.S.C. § 1962(d), against all Defendants; Count III, Violation of FDUPTA against MultiPlan; Count IV, Violation of Florida Statute § 641.513 against United HMO; Count V, Violation of Florida Statute § 627.64194 against United PPO; Count VI, Breach of Implied-in-Fact Contract against United; Count VII, Quantum Meruit against United; Count VIII, Unjust Enrichment against United; and Count IX, Declaratory Judgement against United. AC ¶¶ 169–255. Plaintiffs seek treble damages from United's underpayments, an order from the Court declaring the rate at which Florida law requires United to pay the Plaintiff physicians for their services, and a mandatory injunction compelling United to pay such rates in the future. AC ¶ 8.

II. LEGAL STANDARDS

Under Rule 12(b)(6), a motion to dismiss should be granted if the plaintiff is unable to articulate "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is...