Judge denies HCA contractor TeamHealth motion to dismiss in Buncombe County lawsuit

ASHEVILLE – A lawsuit filed by Buncombe County against a Mission Health physician contracting company will proceed, after a federal judge ruling Jan. 17. The judge denied the contractor's motions to dismiss, strike and stay.

The complaint, filed by Buncombe County in November 2022 in U.S. District Court of Eastern Tennessee, alleged that the Knoxville-based contractor, TeamHealth, created an elaborate system to bill patients for more severe visits than they presented, a process known as “upcoding.” Mission is not part of the lawsuit. HCA Healthcare contracts with TeamHealth to staff physicians in Mission emergency departments.

TeamHealth, the county alleged, attempted to conceal its overbilling scheme routing billings through subsidiary entities that contract with the parent company.

Buncombe is suing on behalf of workers on its group health plan. The county currently employs 1,740 people, according to spokesperson Kassi Day.

The county sued under the Racketeer Influenced and Corrupt Organizations Act, typically reserved for organized crime, conspiracy to commit RICO, unjust enrichment and declaratory relief for the company to bill prudently.

"We see this latest court ruling as nothing more than a procedural step, and in no way changes TeamHealth’s continued position that this lawsuit is frivolous and without merit," TeamHealth spokesperson Josh Hopson said in a statement.

"Buncombe County’s campaign attacks clinicians who provide top-quality care to the citizens of Buncombe County when they are the most vulnerable 24/7, 365 days a year. We continue to stand by them and the care they provide with upmost integrity."

Buncombe's lawsuit, however, distinguishes the doctors from the company's billing practices.

"The polarity as between TeamHealth and its doctors is reflected by the fact that in multiple class actions its own doctors have sued alleging that TeamHealth had failed to share with them certain patient billing revenues known as resident value units," the county's complaint reads.

According to its website, more than 15,000 clinicians are affiliated with TeamHealth across the country. The staffing agency doesn't describe the nature of the affiliation, or the types of providers. The Citizen Times asked Hopson for clarification.

Almost all Mission TeamHealth doctors reside in Western North Carolina.

Buncombe sought to bring these claims through three classes based on the unjust enrichment, RICO and declaratory judgment claims.

TeamHealth initially moved to dismiss, strike and stay the lawsuit in January 2023, then refiled in March after Buncombe amended its complaint.

County v TH Order Doc 50 by Mitchell Black on Scribd

The emergency room staffing company argued that Buncombe’s claim did not meet two of the four elements necessary for a substantive racketeering claim: being part of an enterprise and committing racketeering activity.

TeamHealth argued that because Buncombe did not argue a plausible RICO claim, the conspiracy claim failed.

It also argued that the unjust enrichment claim failed because the county did not meet the heightened requirements for fraud-based RICO claims. TeamHealth also argued that the county did not establish that TeamHealth’s scheme would create future harm, eliminating the declaratory judgment claim.

More: ER billing fraud inside Mission? Buncombe files class-action lawsuit against TeamHealth

More: Mission ER fraud suit: contractor TeamHealth sued for more than $5M under 'RICO'

Judge Clifton L. Corker disagreed, denying each of these assertions.

TeamHealth moved to remove the alleged classes from the record, saying that members of the class did not have enough in common. Clifton argued that their arguments would be better reserved for the class certification stage, and ultimately denied TeamHealth’s claims.

Clifton denied TeamHealth’s motion to stay ― halting discovery while he decided on the other actions ― because he denied its other motions.

Buncombe County is contracting with law firms in Salisbury and Greensboro, and Brentwood, Tennessee and Tampa, Florida on the case.

"We are happy to proceed with the next steps in this case," Mona Lisa Wallace, one of the county's attorneys, said in a Jan. 17 news release.

Wallace's Salisbury firm, Wallace and Graham, represents plaintiffs in the original antitrust lawsuit against HCA Healthcare, a Nashville-based corporation that bought the Mission Health system in 2019 for $1.5 billion.

Her firm also represented two TeamHealth Mission Emergency Department doctors who filed a whistleblower complaint against the Mission Health hospital system, alleging HCA and TeamHealth overbilled patients by assigning superfluous tests. There has been no further action in this lawsuit since the summer because the North Carolina attorney general and the U.S. Department of Justice did not take on the claim.

This story will be updated.

Mitchell Black covers Buncombe County and health care for the Citizen Times. Email him at mblack@citizentimes.com or follow him on Twitter @MitchABlack. Please help support local journalism with a subscription to the Citizen Times.

This article originally appeared on Asheville Citizen Times: HCA Healthcare contractor TeamHealth lawsuit by Buncombe proceeds