Amid ongoing scrutiny of its business practices, physician-staffing giant TeamHealth is now facing a California based class action suit accusing the company of fraudulent patient billing and racketeering.

TeamHealth, based in Knoxville, Tennessee, is one of the largest providers of outsourced clinical staffing and administrative services for hospital-based and freestanding emergency departments in the country.

The company, which was acquired by private equity firm Blackstone Group LP in 2017, operates within 47 states and runs about 3300 acute and post-acute facilities. TeamHealth contracts with hospitals to staff and manage various departments, including emergency, critical care, radiology, and anesthesiology services. The company currently controls about 17% of the emergency medicine market in the United States, according to the legal challenge.

The lawsuit, filed July 10 in US District Court for the Northern District of California, contends that TeamHealth vastly inflates the rates it charges patients and aggressively pursues debt collection if patients fail to pay the inflated prices. The complaint alleges TeamHealth is illegally engaging in the corporate practice of medicine and is avoiding state bans of this practice by operating a web of subsidiaries and purportedly independent organizations.

In a statement to Medscape Medical News, TeamHealth denied the claims and indicated that the company plans to aggressively fight the lawsuit.

“TeamHealth is confident that our billing practices and organizational structure are fully compliant with long established laws and precedents,” TeamHealth said in an emailed statement. “TeamHealth maintains a long-standing practice against balance billing. We believe these claims are wholly without merit and we look forward to vigorously defending ourselves.”

The class action suit claims that TeamHealth is practicing corporate medicine but is able to skirt state laws that prohibit the practice through a spectrum of so-called subsidiaries and “independent” contractors.

As director of the enterprise, TeamHealth controls the terms of its physicians’ employment, all physician staffing decisions, and all the rates its physicians and practice groups charge patients, according to the suit. The complaint claims these rates are inflated far above what is reasonable and customary for the services provided.

The suit’s lead plaintiff, Sia Fraser, claims she experienced just such inflated bills after an emergency department visit. Fraser was treated for emergency gallstone surgery by a physician in a TeamHealth-owned physician group in September 2019 at Tri-City Medical Center in Oceanside, California. TeamHealth billed Fraser $1082 for an hour of observation care during the visit, according to the suit. For the same hospital visit, TriCity Medical Center billed Fraser $63 per hour for observation care performed by hospital physicians.

Craig Briskin, an attorney for Fraser with the law firm Justice Catalyst Law, said his team intends to obtain substantial monetary relief for consumers in the case and aim to return fairness and common sense to medical billing.

The suit comes at the heels of growing skepticism about TeamHealth’s practices. The company has come under fire in recent months for reportedly sending surprise bills to patients and slashing physicians’ hours during the coronavirus health crisis, according to ProPublica. One analysis of the company’s records by the news organization found that TeamHealth is substantially marking up medical bills to boost profits. Two TeamHealth affiliates in Texas, for instance, billed 7.7 times more than their actual costs for clinicians and support services, according to the June ProPublica report.

Most ER doctors are not employees of the hospital where they work. Historically they belonged to doctors’ practice groups. In recent years, wealthy private investors have bought out those practice groups and consolidated them into massive nationwide staffing firms like TeamHealth and its largest competitor, KKR-owned Envision Healthcare.

A bill introduced on Thursday in the US House of Representatives would make permanent some temporary changes that CMS has initiated in its telehealth coverage during the COVID-19 pandemic.

Cosponsored by members of the House Telehealth Caucus, the bipartisan legislation would eliminate most geographic and originating site restrictions on the use of telehealth in Medicare. The bill would allow telehealth visits to be conducted in a patient’s home. It would also permit rural health clinics and federally qualified health clinics to furnish telehealth services.

In addition, the bill would authorize the Department of Health and Human Services to waive or modify telehealth requirements in Medicare during and for 90 days after any emergency period. It would also require HHS to submit a report to Congress on telehealth utilization within 6 months after the end of the emergency period.

Industry groups hailed the introduction of this legislation. But many other details of how Congress or CMS might regulate telehealth coverage after the pandemic is over remain unclear. Moreover, the bill affects only Medicare. States would have to pass their own legislation to make permanent the temporary changes many of them have created in their Medicaid regulations on telehealth. And commercial insurers would not be bound by the House bill, should it be adopted and signed into law.

Among the temporary waivers CMS introduced under the authority of President Trump’s March 13 emergency declaration and the CARES Act, the agency:

— Allowed patients to receive services anywhere, including at home
— Added 135 allowable telehealth services, more than doubling the number of services it allowed before
— Established reimbursement parity for in-person and telehealth visits
— Allowed telephone Evaluation and Management visits to be paid at the same rate as in-person visits
— Allowed the use of telehealth in post-acute care facilities
— Covered telehealth in rural health clinics and federally qualified health centers
— Expanded the types of providers who can supply telehealth services
— Waived the collection of copays for telehealth visits

Prior to the COVID-19 crisis, CMS also expanded allowable telehealth services and introduced “virtual check-ins,” which doctors can use to determine whether patients should be seen in person. In addition, it gave Medicare Advantage plans the option of offering telehealth services to their members.

CMS has already started to use the information it has collected on telehealth use in the pandemic to inform its decisions going forward. “Early CMS data have shown telehealth to be an effective way for people to access health care safely during the COVID-19 pandemic, whether it’s getting a prescription refilled, managing chronic conditions, or obtaining mental health counseling,” Verma writes in the blog post.

Before the public health emergency, Verma said, an average of 13,000 fee-for-service Medicare beneficiaries received telehealth services each week. In the last week of April, nearly 1.7 million beneficiaries received telehealth services. More than 9 million beneficiaries received telehealth visits from mid-March through mid-June, including audio-only visits, virtual check-ins, and e-visits via patient portals.

In rural areas, she notes, 22% of Medicare patients used telehealth; 30% used it in urban areas. Patients in the Northeast and mid-Atlantic used more telehealth than did patients elsewhere.

The global insurance industry could be hit with losses of $203 billion this year because of the coronavirus pandemic, according to Lloyd’s of London, the world’s largest insurance exchange. The claims costs are on a par with some of the most catastrophic hurricanes of recent years and could rise further if the virus isn’t contained, Lloyd’s said.

“Once the scale and complexity of the social and economic impact of COVID-19 is fully understood, the overall cost to the global insurance non-life industry is likely to be far in excess of those historical events,” Lloyd’s said.

Chubb’s disclosure of second quarter 2020 global net catastrophe losses underscores the damage COVID-19 is doing to some carriers’ bottom lines. The global property/casualty insurer estimated $1.8 billion in pretax catastrophe losses for Q2. Of that number, close to $1.4 billion in pretax catastrophe losses stem from the coronavirus pandemic. Losses from severe U.S. weather events and U.S. civil unrest constitute the difference.

Coronavirus losses could be an issue for some time, Chubb Chairman and CEO Evan Greenberg suggested during his comments about 2020 first-quarter earnings earlier this year. “In this case the degree of revenue impact is simply unknowable,” Greenberg said at the time.

CNA Financial Corporation announced that it expects to report net catastrophe losses in the second quarter of 2020 of $182 million related to COVID-19, $61 million related to civil unrest and $58 million related primarily to severe weather-related events, for a total catastrophe loss estimate of $301 million pretax.

The losses are substantially driven by healthcare professional liability with additional impacts from workers’ compensation, management liability, commercial property, trade credit, and surety. Due to the recent timing of the event, emergence pattern of claims, and long tail nature of certain exposures the losses are substantially classified as incurred but not reported (IBNR) reserves.

W.R. Berkley Corp. cautioned that its 2020 second quarter pretax catastrophe losses will reach $145 million, with more than half of that coming from COVID-19 related costs. Out of that total, $85 million stems from COVID-19 claims, the specialty insurer and reinsurer said. Civil unrest created another $20 million in pretax catastrophe losses, and $40 million stems from severe weather-related events, W.R. Berkley said.

W.R. Berkley indicated its COVID-19 claims, due to the pandemic and resulting economic crisis, consist of losses mostly from “contingency and event cancellation policies, workers compensation, professional liability and other liability-related products, as well as commercial property-related business interruption coverages.

The WCIRB estimates about 30,000 COVID-19 claims will be filed in California, generating about $1.2 billion in costs. About 15,000 have been filed so far. Medical research on causative and risk factors are in the process of being created and published. This research will be critical evidence as causation and apportionment issues are litigated in these claims.

COVID-19 morbidity and mortality reports in the U.S. have not included findings specific to young adults. The Centers for Disease Control and Prevention provides a list of conditions and associated behaviors, including smoking, conferring risk of severe COVID-19 illness regardless of age.

A new University of California San Francisco study published this month in the Journal of Adolescent Health, examined young adults’ medical vulnerability to severe COVID-19 illness, focusing on smoking-related behavior.

A young adult subsample (aged 18-25 years) was developed from the National Health Interview Survey, a nationally representative data set, pooling years 2016-2108. The medical vulnerability measure (yes vs. no) was developed, guided by the Centers for Disease Control and Prevention risk indicators. The estimates of medical vulnerability were developed for the full sample, the nonsmoking sample, and the individual risk indicators. Logistic regressions were conducted to examine differences by sex, race/ethnicity, income, and insurance.

Smoking was the most common risk factor for severe COVID-19 complications among otherwise largely healthy young people. For young men, smoking or vaping may more than double the potential of being hospitalized, needing intensive care or even dying from the virus. For young women, it could increase the possibility 1½ times.

The findings from this analysis indicate that nearly one in three young adults are medically vulnerable to severe COVID-19 illness (32%).

In contrast, in the nonsmoking young adult group, only about one in six is medically vulnerable to severe COVID-19 illness (16%).

This difference between estimates is driven largely by the sizable portion of young adults who reported that they engaged in past 30-day smoking (1 in 10) and past 30-day e-cigarette use (1 in 14).

By contrast, relatively fewer young adults reported medical conditions identified by the CDC as conferring severe illness risk.