Nashville at law: Firm says 'cozy' BlueCross-TMA ties cost it millions

Also: West End hotel sued over ATM fees [From our print edition featured in Monday's City Paper]

Nearly a year after being sued by the Tennessee Medical Association and two of its physician members, a Franklin health care claims analysis business is firing back with a $2.5 million counterclaim.

In June of 2009, the TMA and doctors William Goodman and Mary Keown sued Health Research Insights, BlueCross BlueShield of Tennessee and the Metro Nashville Board of Education for defamation, interference with business relationships and breach of contract.

According to the original complaint, HRI had contracted with the Board of Education to collect any overpayments made by its BlueCross-administered insurance plan to health care providers. After using its proprietary algorithm to identify “upcoding” — a process in which health care providers mis-classify health care services in order to receive larger reimbursements from health plans — HRI sought to collect overpayments from Goodman and Keown.

But the TMA and doctors argued that, contrary to HRI’s assessment, the doctors received no overpayments and, in fact, HRI had no contractual right to come after overpayments in the first place. Currently, the original plaintiffs are seeking summary judgment against HRI, arguing that the deposition of an “independent coder” who analyzed the claims in question showed that Goodman and Keown billed every claim correctly.

Meanwhile, the school board has had the majority of claims against it dismissed and is waiting on a ruling on the rest, according to Adams and Reese attorney Timothy Gary.

“It’s really unfortunate that the board was pulled into this and Metro was pulled into this,” Gary said. “The folks who administered the plan are just trying to be sure that they complied with all their obligations.”

But for the TMA and HRI, it appears the argument is far from over. Late last month, HRI filed a counterclaim of torturous interference against TMA, alleging that the physician association conspires with insurers like BlueCross to “suppress, eliminate and destroy competition and maintain artificial and noncompetitive prices for physician services” in Tennessee and Nashville, thereby interfering with HRI’s business advantage.

The counterclaim says that, before HRI’s mathematical tools hit the market, BlueCross had a “cozy relationship” with the TMA to allow TMA members and its individual physician members to earn “excessive, exorbitant and noncompetitive fees and incomes by upcoding claims for services rendered while BlueCross tacitly looked the other way or kept a blind eye to such upcoding when it involved administrative service contracts where the victim of such conduct and overpayment came from the employer group and not BCBST.”

Because TMA and the physicians “acted with bad and evil motive” to suppress competition and maintain high prices, the counterclaim reads, HRI estimates it’s been injured to the tune of $2.5 million, weakened as a competitor and forced to invest “substantial monies” to stay viable.

An attorney for TMA declined to comment and HRI’s legal counsel did not return calls.

BlueCross’ attorney, Robert Boston of Waller Lansden Dortch & Davis, said only that BlueCross is “disappointed that with all that’s happening in the health care debate and evolution today, that it finds itself bogged down in this type of accusation and debate caused by a third party.”

United States District Court

Terrell Parker v. Loews Nashville Hotel Corp. Terrell Parker is, seemingly, on a mission. The Williamson County woman has been the lead plaintiff in at least four class-action lawsuits filed in the past several years against the operators of automatic-teller machines.

The suit cites the Electronic Funds Transfer Act, a federal law requiring, among other things, operators of ATMs to disclose if a fee will be imposed for usage. Parker’s earlier lawsuits ended with a settlement from First Citizens Bank and another settlement is pending against SunTrust Bank. A case filed last year against Regions Bank was dismissed with prejudice.

But banks aren’t the only operators of ATMs. Parker’s latest action is against the Loews Vanderbilt. On April 10, according to the complaint, Parker withdrew money from the ATM at the swanky West End hotel and was charged a $2.95 “terminal-owner fee.”

“However, at the time of the above-described transaction, there was no notice posted “on or at” the ATM operated by Defendant apprising consumers that a fee would be charged for use of the ATM,” the filing in U.S. District Court claims. “Because Defendant did not post the required notice, it was not permitted to charge a usage fee to Plaintiff and other class members.”

The federal statute allows for the payment of actual damages — in this case, Parker and the joinders’ $2.95 — as well as statutory damages of up to $1,000 per transaction. Parker is also seeking attorney’s fees and costs.

Jackson attorneys Clinton Scott, J. Brandon McWherter and Justin Gilbert of the firm Gilbert Russell McWherter represent Parker. A case management conference with Judge Aleta Trauger is scheduled for July 12.