A tangle of contracts and claims of defamation have led the Tennessee Medical Association and a pair of local doctors to file a lawsuit against Tennessee’s largest insurer as well as the Metro Nashville Board of Education and Franklin-based Health Research Insights Inc.
The plaintiff physicians, William Goodman and Mary Keown, both members of the TMA, had contracted with BlueCross BlueShield of Tennessee to provide services to enrollees of its plans. As per the contract, both physicians provided services to members of the health plan BlueCross administered on behalf of the Board of Education.
The lawsuit, filed June 12 in Davidson County Circuit Court, is available at this link. It claims that HRI, which is in the business of identifying and recovering overpayments in the health care industry, represented to the School Board that through the use of a specially developed mathematical formula, it could determine which of the claims it examined were overbilled.
In exchange for a portion of any monies “extracted” from physicians, HRI would also, the lawsuit states, recover the payments. The school system engaged HRI, which proceeded to analyze the data it was presented.
It was then, the lawsuit alleges, that the plaintiffs began receiving letters and phone calls from HRI employees, advising them that certain claims had been determined to be overbillings. Physicians were given a choice between sending payment to HRI within 15 days or submitting medical records to prove the payments were proper.
The complaint quotes the letters, which demand that the doctors respond and suggest, according to the complaint, that failure to do so will have "severe, possibly criminal, consequences."
The allegations by HRI centered on what is known as “up-coding.” When claims are submitted to third party administrators such as BlueCross, they have a numerical code affixed to them indicating the level of service provided to the patient. HRI was accusing the physicians of improperly billing for a greater amount of service than was provided.
Many of the doctors receiving letters and calls sent payments to HRI.
In addition to denying the up-coding, the TMA and plaintiffs contend that the contractual framework created by the agreements between the physicians and BlueCross, and between the School Board and BlueCross, prohibit HRI from collecting overpayments. The only party to the case with the authority to pursue over-billed claims is BlueCross, the lawsuit asserts.
By virtue of the same contractual framework, the alleged over-billings involved in this matter, which took place between 2006 and 2007, are too old to be pursued. The physicians' agreement with BlueCross contains language stating that the insurer will not raise issues with claims more than two years after they were submitted.
The lawsuit accuses the defendants of defamation, interference with business relationships and breach of contract. It seeks a court finding that only BlueCross can question medical providers in the Metro Schools plan about possible overpayments and an injunction requiring HRI to stop trying to get money out of doctors while returning all payments it has collected.
The exact amount of monetary damages sought is unspecified, but in addition to compensatory and punitive awards, the legal action also calls for "a return of discounts" given by physicians to BlueCross under the Schools contract in 2006 and 2007.
Health Research Insights was founded in 1997, by Theodore L. Perry, Johnny E. Gore and Charles L. Polatsek. Originally focused on data mining and analytic services, it entered its current line of work in 2003.
The company, BlueCross and a representative of the Board of Education all declined to comment on the case.
Filing the complaint on behalf of the TMA and the physicians is David L. Steed of Cornelius & Collins LLP.
United States District Court
Corona Development LLC v. Vivid Restaurant Concepts Inc. and Kevin O'Halloran, receiver. Filed June 8. The owner of a Knoxville property where Vivid operated an Amerigo restaurant until it was shut down in April is seeking more than $875,000 in damages. Corona claims Vivid, which has been under a court-ordered receivership since January, defaulted on its lease and damaged the property.
In May, Vivid and its creditors agreed to the sale of most of its assets — not including any property related to the Knoxville outlet — to a new company run by Paul Schramkowski, manager of the Amerigo restaurant on West End, along with another restaurant manager in Mississippi.
Attorney Barbara Holmes of Harwell Howard Hyne Gabbert & Manner, representing O’Halloran, said he disputes the allegations and emphasized that she does not expect the lawsuit to imperil that deal.
Teaira King, Timothy Wilson and Broderick Porter-Baugh v. Nashville 5G Holdings LLC, John R. Isaac Jr. and William McKechnie. Filed June 12. Three African-American former employees sue the local franchisee of fast-food chain Five Guys Burgers & Fries for racial discrimination. They say their bosses engaged in "racially offensive, inappropriate and unlawful actions, including repeated racially derogatory comments, threats and other mistreatment."
Attempts to reach the defendants have been unsuccessful.
Saravoot Siriyutwatana et al. v. 1st Discount Brokerage Inc. and Donna L. Jones. Brea L. & William E. Faeth v. 1st Discount Brokerage Inc. Plaintiff's motion to dismiss Siriyutwatana filed June 8. Joint motion to dismiss Faeth filed June 15.
A global settlement has been reached to provide at least some compensation to the victims of Brentwood investment adviser Michael J. Park, who pleaded guilty to mail and wire fraud in February. 1st Discount Brokerage Inc., of West Palm Beach, Fla., entered into the settlement after roughly 20 former investment clients of Park lodged claims against it. The customers said 1st Discount, with which Park was affiliated, should have known he was scamming them.
Besides the federal lawsuits, other customers had asserted claims through bankruptcy court, and sources close to the case say there were arbitration cases pending as well as other claims. The amount of the settlement payment was not divulged.
Tennessee Court of Appeals
Kamarjah Gordon (deceased), by and through her next of kin, Tosha Gordon, and Tosha Gordon individually v. Jeffrey D. Draughn M.D., Tennessee Woman’s Care P.C., and HCA Health Services of Tennessee d/b/a Centennial Medical Center. Ruling handed down June 16
; copy at this link.
Reversing a ruling by Davidson County Circuit Court Judge Barbara N. Haynes that had thrown out this medical malpractice case, the appellate judges find that the plaintiff's failure to include her legal claim in a bankruptcy filing was an honest mistake that does not make her ineligible to sue.
Tosha Gordon, an expectant mother, was admitted for a 23-hour observation period at Centennial while suffering from pregnancy-induced hypertension. But the hospital discharged her before the 23 hours were up. The same day, she went to another hospital where doctors detected a decreased fetal heart rate and performed an emergency cesarean section. The child, Kamarjah, died the next day.
The defendants' attorneys did not respond when queried about whether they plan to appeal to the Tennessee Supreme Court.
Plaintiffs' attorneys: Memphis lawyers Carroll C. Johnson III and Timothy R. Holton. Defendants' attorneys: Noel F. Stahl and Jeffrey Zager of Miller & Martin PLLC; Dixie W. Cooper and Chris J. Tardio of Gideon & Wiseman PLC.
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