Envision Healthcare alleged UnitedHealthcare unilaterally lowered contracted payments to Envision physicians and refused to add new Envision physicians to its insurance network, Axios reports. Prior to the lawsuit, UnitedHealth Group was reportedly interested in acquiring AmSurg, Envision's ambulatory unit, but has pulled out of talks since then.
Here's what you should know.
1. Envision is suing UnitedHealthcare, saying its physicians faced pressure "to contract with United on unreasonable terms or to be out-of-network."
2. According to court documents, Envision is seeking monetary compensation for United's alleged continued breaches of the 2009 Medical Group Participation Agreement.
3. Envision claims United "willfully" disregarded the 2009 agreement.
4. The lawsuit stems from when Sheridan and UnitedHealthcare entered into the 2009 Medical Group Participation Agreement.
In December 2016, Envision merged with AmSurg and as a result, Sheridan became an Envision subsidiary.
The 2009 agreement had a provision where if Sheridan was purchased, the acquiring party would become subject to the 2009 agreement.
To comply with the contract, Sheridan notified United of the Envision merger. Sheridan sought guidance from United on how to add to add new physicians to UnitedHealthcare's network in December 2016.
After the acquisition, Envision claims United failed to provide "meaningful guidance," and as a result began a formal notification process in August 2017. Envision provided a roster of Envision's non-participating groups to be affiliated within 30 days.
United affiliated some of the providers, but not all of the providers, in defiance of the 2009 agreement.
5. Concerning the unilaterally lowered contracted payments, Envision claims United unilaterally adjusted its percentage payment rate but failed to notify Envision. Envision also claims United failed to recognize Envision's multiple objections to the PPR adjustments.
United allegedly moved forward in multiple instances adjusting the PPR downward, while Envision frequently objected.
6. Envision is requesting a jury trial.
7. Axios believes the lawsuit is in response to legislative and investor pressure concerning the companies' alleged surprise medical bills. The report said, "The company is attempting to reverse the narrative in court," by attributing its surprise billing to UnitedHealthcare's lack of entering Envision's providers into its network.
Update: Bloomberg reports UnitedHealth dropped out of talks to purchase Envision's ambulatory segment following the lawsuit, according to a person familiar with the matter. Neither UnitedHealthcare nor Envision commented on the matter.
Concerning Envision acquisition rumors, Bloomberg reports the loss of UnitedHealthcare could complicate a sale of the company. Seperate private equity firms previously expressed interest in acquiring all of or part of Envision.