KK: Is it fair to say that the barriers to litigation have allowed for commercial payers to take advantage of emergency physicians and other providers?
IE: Perfectly well said.
KK: How many times have you decided to file suit against a commercial payer regarding physician reimbursement?
AS: We have filed suit dozens of times, including against every major payer. Emergency physicians need to understand the health plans take up to a 10-, 20-, or 30-year outlook on their business and emergency physician groups, especially those that are independent, probably take a weekly or a monthly view. In California, for example, if you had most of the groups who were out of network and they all decided to sue Anthem, it would be very hard for Anthem to counter. Their business model is predicated upon only a certain amount of people doing it even though many others can.
KK: In rough numbers of the suits that you have filed, how often have you been successful?
AS: I think on behalf of Irv’s groups, we have always recovered money.
KK: I wouldn’t have guessed that. You’re saying that if you decide to challenge them and you pick and choose your battles appropriately, you are going to recover something in every case.
AS: I use the stock market phrase, “Past performance is not a predictor of future performance.” The reality is that if you analyze these cases appropriately, you can do it. If you litigate and enter into a contract and that contract means that they are not down-coding any more, they are going to pay you a set rate that is higher than they were reimbursing you before. When you look at your whole business model and you are taking a multiyear view, those numbers quickly add up and are substantially more. In the vast majority of cases, we recover well in excess of the fees that are incurred.
KK: Let’s talk about this most recent win. Tell us about the background of the issues that led you to file suit in this particular case.
AS: There has been a problem in managed care with IPAs going out of business or IPAs being underfunded in the managed care model. That’s been a consistent problem for decades. Irv and I have had multiple discussions over the years about what to do with this problem because it costs his group and other emergency physicians a lot of money. There was a group in South Bay called La Vida, headed by a physician named Dr. Chidi. He had a lot of problems with his IPA; it was upside down. The health plans and the government regulators knew about it, but they really didn’t do anything for years. So, for years, emergency physicians like Irv’s group were not being paid appropriately. One day, the IPA went out of business. They didn’t declare bankruptcy; they just literally turned off the lights and left. As the head of the group, Dr. Chidi said, under oath and deposition, they didn’t even have enough money to buy a stamp. Irv’s group was owed a lot of money because they were out of network with the IPA, and they were out of network with the health plans that were supporting the IPA. We felt like this would be a good cause where we could hold the plans to their obligations to reimburse for emergency services they were advertising for. They should pay for it. So we filed a case in the trial court, and we lost immediately because health plans are allowed to delegate their responsibilities. The health plans took the position that they can delegate to whomever they want even though we had no choice in it at all. They can just delegate it, and it would be fine. Once they delegated it, they were done. We like to use the example of they could’ve delegated it to Joe’s IPA. Joe could have gone to the south of France, and emergency physicians wouldn’t get paid.