Molina to pay ED staffing companies $19 million in underpaid claims lawsuit

A Texas state court jury on Thursday awarded two emergency department staffing companies more than $19 million in damages from Molina Healthcare of Texas due to underpaid claims.

ACS Primary Care Physicians Southwest PA and Emergency Services of Texas will receive $1.5 million in actual damages and $17.5 million in punitive damages. The Houston jury found Molina Healthcare “engaged in unfair or deceptive practices” in paying emergency department claims.

The staffing companies’ attorney, John Zavitsanos, said this was the first lawsuit that evaluated how ACA plans would have to reimburse for ED claims. ACS and Emergency Services first sued Molina in 2017.

During trial, the plaintiffs asked the jury for $17.4 million toward out-of-network reimbursements for 13,600 underpaid claims from ED doctors, as well as $100 million in punitive damages, said Zavitsanos, managing partner at Ahmad Zavitsanos Anaipakos Alavi & Mensing PC.

The staffing companies allegedly charged Molina 900% of the Medicare rate for emergency department claims. Zavitsanos said the insurer reimbursed doctors less than $200 in some cases for ED treatment.

Molina argued that it did not underpay claims as it established its usual rate as 100% of Medicare costs with a reasonable margin after calculating actual costs of care. Molina claimed it would have had to increase premiums if it paid the staffing companies’ bills, which would lead consumers to drop the more expensive health coverage.

In a statement, a Molina Healthcare spokesperson said that the insurer works to provide low-income members with reliable and affordable healthcare and pays doctors fair, usual and customary rates, whether they are in network or out-of-network.

“In this case, Molina believes that the rate it paid to the plaintiff’s doctors was usual and customary, and it is clear that the jury has rejected the plaintiff’s exorbitant demands,” the spokesperson said.

“This idea that they’re going to go broke is just nonsense,” Zavitsanos said. “It’s belied by their financial documents.”

Other Texas-based groups are currently petitioning the Texas Supreme Court to revive a lawsuit against Molina Insurance that claims the company grossly underpaid physicians, leaving them without financial recourse.

“We are pleased that the jury held Molina Healthcare accountable for their abusive reimbursement practices,” the plaintiffs said in a joint statement. “The evidence showed that Molina, like many insurance companies across the United States, refused to negotiate fair reimbursement with emergency medicine physicians, coercively underpaid physicians and exposed its members to its underpaid balances.”