JMF Med., LLC v. Team Health, LLC

• Decision Date: 29 September 2020
• Docket Number: CIVIL ACTION NO. 19-837-JWD-SDJ
• Parties: JMF MEDICAL, LLC, Freeman MD, LLC, Nickles & Ashlyn Bergeron, LLC, Joseph Thomas Jr. MD, LLC, Ashlyn Kidd Bergeron, Nathan Paul Freeman, Jared Michael Fabre, Leo David Verlander, Jr., Joseph Thomas, Jr., Nickles Paul Bergeron v. TEAM HEALTH, LLC, f/k/a Team Health, Inc.; ACS Primary Care Physicians Louisiana; Team Health Holdings, Inc.; Ameriteam Services, LLC, HCFS Healthcare Financial Services, LLC
• Court: U.S. District Court — Middle District of Louisiana

490 F.Supp.3d 947

JMF MEDICAL, LLC, Freeman MD, LLC, Nickles & Ashlyn Bergeron, LLC, Joseph Thomas Jr. MD, LLC, Ashlyn Kidd Bergeron, Nathan Paul Freeman, Jared Michael Fabre, Leo David Verlander, Jr., Joseph Thomas, Jr., Nickles Paul Bergeron

v.TEAM HEALTH, LLC, f/k/a Team Health, Inc.; ACS Primary Care Physicians Louisiana; Team Health Holdings, Inc.; Ameriteam Services, LLC, HCFS Healthcare Financial Services, LLC

CIVIL ACTION NO. 19-837-JWD-SDJ

United States District Court, M.D. Louisiana.

Signed September 29, 2020

Andrew Allen Lemmon, Lemmon Law Firm, L.L.C., Hahnville, LA, Dennis G. Pantazis, Jr., Pro Hac Vice, Wiggins Childs, Birmingham, AL, for JMF Medical, LLC, Freeman MD LLC, Nickles & Ashlyn Bergeron, LLC, Joseph Thomas Jr. MD, LLC, Ashlyn Kidd Bergeron, Nathan Paul Freeman, Jared Michael Fabre, Leo David Verlander, Jr., Joseph Thomas, Jr., Nickles Paul Bergeron.

A. Gregory Grimsal, Donna Phillips Currault, Gordon, Arata, Montgomery, Barnett, McCollam, Duplantis & Ea, New Orleans, LA, Christina Lehm, Pro Hac Vice, Peter R. Goldman, Pro Hac Vice, Nelson Mullins Broad and Cassel, Fort Lauderdale, FL, M. Jefferson Starling, Pro Hac Vice, Ryan M. Hodinka, Pro Hac Vice, Balch & Bingham LLP, Birmingham, AL, for Team Health, LLC, Team Health Holdings, Inc., AmeriTeam Service, LLC, HCFS Healthcare Financial Services, LLC, ACS Primary Care Physicians Louisiana.

RULING AND ORDER

JOHN W. deGRAVELLES, JUDGE

Before the Court is a Motion to Dismiss Class Action Complaint by Defendant, Team Health Holdings, Inc. ("THH") under Rule 12(b)(2); by Defendants, THH, Ameriteam Services, LLC ("Ameriteam"), HCFS Healthcare Financial Services, LLC ("HCFS"), and Team Health, LLC ("Team Health") under Rule 12(b)(1); and by all Defendants, THH, Ameriteam, HCFS, Team Health, and ACS Primary Care Physicians Louisiana ("ACS") (collectively "Defendants") under Rule 12(b)(6). (Doc. 19). Plaintiffs, JMF Medical, LLC ("JMF"), Freeman MD, LLC ("Freeman"), Nickles & Ashlyn Bergeron, LLC ("N&A"), Joseph Thomas Jr. MD, LLC ("Thomas"), Ashlyn Kidd Bergeron ("A.K. Bergeron"), Nathan Paul Freeman ("N.P. Freeman"), Jared Michael Fabre ("Fabre"), Leo David Verlander, Jr. ("Verlander"), Joseph Thomas, Jr. ("J. Thomas"), and Nickles Paul Bergeron ("N.P. Bergeron") (collectively "Plaintiffs"), on behalf of themselves and others similarly situated, oppose the motion. (Doc. 28). Defendants filed a reply. (Doc. 32). Defendants also filed supplemental authority in further support of the motion to dismiss. (Doc. 35). Oral argument is not necessary. After carefully considering the law, facts, and arguments of the parties, Defendants’ Motion to Dismiss is denied pursuant to Rule 12(b)(1), is denied pursuant to Rule 12(b)(2), and is granted in part and denied in part pursuant to Rule 12(b)(6). Plaintiffs’ motion for leave of court to amend their Complaint is denied.

I. FACTUAL ALLEGATIONS

For the purposes of a motion to dismiss, the Court must accept the following factual allegations as true and draw all reasonable inferences in favor of the plaintiff. Lormand v. US Unwired, Inc. , 565 F.3d 228, 232 (5th Cir. 2009).

A. Background

Plaintiffs filed a Class Action Complaint "on behalf of themselves and others similarly situated" against Defendants on December 2, 2019. (Doc. 1 at 2). Plaintiffs "are a group of emergency room physicians and their entities" who worked "for the Team Health Organization"¹ and claim that they filed suit "due to Defendants’ routine and systematic failure to pay physicians for the services Plaintiffs provide to their patients." (Id. ). Specifically, Defendants, "through the Team Health Organization," "do not pay Plaintiffs and other Louisiana physicians for ‘Relative Value Units’ ("RVUs") earned when patients are treated by nurse practitioners and/or physician assistants ... under the physician's direction." (Id. at 2-3). Plaintiffs allege that "Defendants are in breach of their contracts with Plaintiffs, have perpetrated wire and mail fraud in furtherance of a racketeering scheme in violation of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), and have been unjustly enriched at the expense of Plaintiffs." (Id. at 3).

"Team Health" is a "national multi-billion dollar staffing company." (Doc. 1 at 10). "Team Health, through its subsidiaries," allegedly contracted with "approximately 3,900 independent contractor physicians" which included Plaintiffs to "handle emergency care at approximately 3,300 hospitals across the country." (Id. ). These hospitals are referred to as the "Team Health facilities". Defendants allegedly "signed exclusive contracts" with the Team Health facilities and prevented emergency care physicians from directly contracting with the Team Health facilities. (Id. ). In order to work in emergency rooms at Team Health facilities, physicians allegedly must contract with Defendants. (Id. ). "Team Health" also allegedly contracts with physician assistants ("PAs") and nurse practitioners ("NPs") to treat patients under a physician's direction. (Id. ). PAs and NPs are collectively referred to as Advance Practice Clinicians or "APCs". Under these contracts, Defendants allegedly "make money based on the number of patients each physician is responsible for during his/her shift, and the services provided to each patient." (Id. at 11).

B. The RVU Bonus Program

Dating back to 2012, Defendants "sought to add a bonus program" to the contracts of the physicians at Team Health facilities to "incentivize the physicians to take on ... more patients ... so Defendants could bill more and make more money." (Id. ). The bonus program was "motivated by the need to attract and retain the best possible physicians" to the Team Health facilities. (Id. ).

"RVUs assign a value to each service provided and the resources used to provide that service." (Id. at 12). RVUs are generated when physicians see the patients directly and when they supervise NPs and PAs. (Id. ). When RVUs are generated through Plaintiffs’ supervision of NPs and PAs without Plaintiffs seeing the patient directly, this is referred to as "Assisting RVUs", "Supervisory RVUs" or "Shared RVUs". (Id. ).

Physicians are responsible for every patient whose chart he/she signs. (Doc. 1 at 13). This is the case whether the physician sees the patient directly or supervises an APC's treatment plan. (Id. at 13). Plaintiffs allege that when Defendants "recruited Plaintiffs to participate in the RVU bonus program, Plaintiffs were assured that, along with the liability they [were] assuming, they would receive credit for RVUs generated through the supervision of APCs." (Id. at 15). Despite this assurance, Plaintiffs claim that Defendants "failed and refused to pay Plaintiffs accordingly." (Id. ). Plaintiffs refer to this assurance of RVUs for the supervision of APCs and then failure to pay physicians that bonus amount the "scheme" by Defendants through the Team Health Organization. (Id. at 16). Each time the Team Health Organization failed to make payment, it "committed a predicate act of wire and mail fraud in furtherance of the RICO conspiracy." (Id. ).

The contracts between Plaintiffs and Defendants provided for the RVU bonus program for supervision of APCs. (Id. ). Plaintiffs aver that under the terms of the contracts, Defendants do not have discretion in crediting RVUs and cannot refuse to credit Assisting RVUs toward Plaintiffs; however, Defendants did so in "furtherance of the [s]cheme to defraud the Plaintiffs and the putative class of rightfully owed payments." (Id. at 18). Plaintiffs believed that the "data on their weekly paychecks and paystubs reflected bonus credit for the RVUs generated through every chart they signed." (Id. at 19). However, Plaintiffs claim that Defendants were "secretly subtracting out the Assisting RVUs from the bonus credit on each paycheck." (Id. ). Plaintiffs also claim that they were "unable to discern what Defendants were doing" because "the underlying data was hidden" from them. (Id. at 20). Therefore, Plaintiffs conclude that Defendants are "in breach of those contracts" and "in bad faith breach of those contracts." (Id. at 21).

Plaintiffs also claim that "Defendants acted in concert with one another throughout the United States to violate the RICO statute through a pattern of racketeering activity for personal, financial gain, to fraudulently convey false and misleading information concerning the payments to healthcare providers at Team Health facilities." (Doc. 1 at 21). Specifically, Plaintiffs allege that Team Health "created and signed the underlying contract with Plaintiffs", (id. ); Ameriteam "managed the contracts with Plaintiffs", (id. ); "ACS subcontracted billing functions to HCFS who in turn billed for Plaintiffs’ Assisting RVUs", (id. at 22); THH "directed the activities of all its agents and subsidiaries, including the decision to not pay Plaintiffs ... for RVUs ... by supervising APCs", (id. ); and THH "directed the activities of the subsidiary Defendants via apparent, actual, explicit, and/or implied authority", (id. ). Plaintiffs refer to all of the Defendants acting "in concert" as the enterprise known as "TeamHealth" or the "Team Health Organization". (Id. ).

Alternatively, Plaintiffs plead that the corporate veil of THH should be pierced. (Id. ). THH allegedly "fails to observe corporate formalities in that its officers and shareholders hold the same role in its subsidiaries, all subsidiaries are on the same email system, all use the same letterhead, have the same principal place of business and office space, and use the same logo when communicating internally and with outside parties." (Id. at 22-23). THH "fails to sufficiently capitalize its subsidiaries and siphons funds from operating subsidiaries without formal intercompany agreements." (Id. at 23). THH "created an organizational structure wherein there would be an injustice of unfairness if Defendants are allowed to operate separately, under the control of their holding...