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Tennessee Medical Association Sues Recovery Contractor

John Commins, for HealthLeaders Media, July 7, 2009

The Tennessee Medical Association and two Nashville physicians have filed a potentially precedent-setting lawsuit against a fee audit recovery contractor that the physicians' organization says made false assertions of overpayment on out-dated claims and subjected physicians and their staff to "strong-arm" letters and high-pressure telephone collection efforts.

The contractor, Franklin, TN-based Health Research Insights, Inc., was hired by the Metropolitan (Nashville) Board of Public Education to recover alleged overpayments that were made in 2006 and 2007 on behalf of the board through Blue Cross Blue Shield of Tennessee, the third-party administrator for MBPE's health benefits plan. MBPE and BCBST are also named in the suit, which was filed in Davidson County Chancery Court.

The TMA and the two physicians--a pediatrician and an ophthalmologist--allege that HRI sent letters to scores of physicians, accusing them of overbilling and demanding the physicians send money or confidential medical records to justify the treatment provided.

"This is about protecting our patients' private health information and fair treatment for physicians," says Richard J. DePersio, MD, president of the 7,800-member TMA. "Our members complained to us about the HRI 'strong-arm' letters. We had to act because we cannot tolerate business practices that ignore state law and contracts, threaten patient privacy, and make false accusations of physician fraud. The threats and intimidation tactics used by HRI were a catalyst for our actions."

Theodore Perry, HRI's president/CEO declined to comment when contacted this week by HealthLeaders Media.

BCBST has denied any connection with HRI and has not claimed that the physicians were overpaid.

The lawsuit, filed last month, asserts that HRI caused MBPE to breach its contract with BCBST; violated the State Consumer Protection Act by engaging in unfair or deceptive business practices toward the physicians; and sought to obtain private patient information through misrepresentation.

The suit alleges MBPE contracted with HRI to recover overpayments even though MBPE had previously assigned matters relating to overpayment recovery to BCBST. In addition, TMA officials say HRI was going after payments that were more than 18 months old, a violation of state collection laws, and that physicians who did not respond to the letters were subjected to high-pressure telephone collection efforts by HRI employees.

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