Tennessee Medical Assn. sues collections firm

Health Research Insights has contacted physicians in several states this year trying to collect alleged overpayments.

By Emily Berry — Posted July 6, 2009

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The Tennessee Medical Assn. has filed a lawsuit against a collections company working in several states to take back reimbursements paid to doctors. The lawsuit alleges fraud and asks a state court to block the company from trying to collect any more money from physicians.

Health Research Insights, based in Franklin, Tenn., has sent letters to physicians in Georgia, Kentucky, Tennessee and Texas demanding repayment for claims that in some cases dated back years. The letters accused physicians of coding visits at too high a level. According to its own descriptions, HRI bases the accusations of upcoding on an analysis of claims data, not reviews of medical records.

The TMA filed its lawsuit June 12. Other plaintiffs are an ophthalmologist and a pediatrician from Nashville, Tenn., who received letters from HRI in April of this year seeking repayment for reimbursements made in 2006 and 2007.

The lawsuit also names as a defendant Metropolitan Government of Nashville and Davidson County, Tenn., and its board of education, which runs a self-insured health plan for school employees. BlueCross BlueShield of Tennessee, which was contracted as a third-party administrator for the school plan that TMA says used HRI, is also a named defendant. Before the lawsuit, the Tennessee Blues had sent letters to doctors disavowing any involvement in HRI's collections efforts.

The Metropolitan Government of Nashville hired HRI earlier this year to collect alleged overpayments to physicians who cared for school employees in the plan. According to the TMA's lawsuit, the arrangement allowed HRI to keep 40% of anything it was able to collect from physicians. The metro government said it would not comment on the lawsuit.

HRI President and Chief Executive Officer Theodore Perry, PhD, said company policy barred him from commenting on pending litigation.

Organized medicine in several states will be watching to see what comes out of the lawsuit, in part because it could set legal precedent. Although states commonly set a statute of limitations on retrospective overpayment collections, those laws don't necessarily apply to self-insured plans. Self-insured plans are typically run by large employers who directly pay employees' claims as opposed to paying premiums to a health plan.

Self-insured health plans generally are governed by federal ERISA law, which includes no clear time limit on overpayment collections. If a court rules that there is no limit, it could open up physicians to collections efforts on claims years past from HRI and other companies like it, experts said.

For that reason, other states, particularly where HRI has been active, are watching what happens in Tennessee.

The Medical Assn. of Georgia "supports the actions of the Tennessee Medical Assn.," MAG spokesman Tom Kornegay said, but hasn't taken any formal action against HRI itself.

MAG pressured Atlanta-based paper company Georgia Pacific, which runs a self-insured plan, to suspend its collections efforts through HRI earlier this year. Physicians who had cared for Georgia-Pacific employees were among the first to receive letters from HRI.

Earlier this year, HRI began trying to collect from physicians in Kentucky on behalf of a self-insured health plan run by the local chapter of the United Food and Commercial Workers union. Kentucky Medical Assn. President James F. Beattie, MD, sent a letter to the chapter's board of trustees June 10 warning them that some physicians were considering dropping UFCW members as patients because of fear of collections efforts, which he called "harassment."

Five days later, the union told the KMA it had asked HRI to suspend its work.

Sarah McKinnie-Chasteen, manager of medical practice advocacy for the KMA, said the letters have stopped, but that the association is "gathering data in case we need to take further action."

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