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Analysis

Jury Awards ER Docs $9.4M in Centene Breach of Contract Suit

By John Commins  
   August 20, 2020

Plaintiffs say the final award is expected to reach $13 million with attorneys' fees and interest. Centene said it will appeal.

A federal jury in Arkansas this week handed up a $9.4 million breach of-contract award to a Tennessee-based emergency physician group after finding that subsidiaries of Centene Corporation violated their contracts by systematically underpaying the physicians.  

Attorneys for Knoxville-based Southeastern Emergency Physicians, LLC, a subsidiary of TeamHealth Inc., said the final award could hit $13 million with legal fees and interest. 

"The Centene defendants ignored their written agreements and tried to cheat these hardworking emergency room doctors," said John Zavitsanos, plaintiffs' lead attorney and a partner with Houston-based AZA or Ahmad, Zavitsanos, Anaipakos, Alavi & Mensing P.C.

"They treated commercial insurance claims like Medicare payments, they tried to hide which company owed the money, they paid late. Their cavalier attitude toward these essential workers was abominable," Zavitsanos said.

In an email to HealthLeaders, NovaSys Health, a Little Rock-based subsidiary of Centene, said: "We disagree that NovaSys breached the contract, and we plan to appeal.  All of the health insurance claims at issue have already been paid at the appropriate rate for ACA claims."

According to the plaintiffs' attorneys, Centene-controlled NovaSys agreed in a 2011 contract to pay the ER doctors 75% of the regular commercial insurance billing rates. Instead, the doctors were paid only 10% of the billing, and slowly.

The plaintiffs also alleged that Centene tried to hide their ownership of the entities responsible for paying the doctors.

"Today's ruling is a win for frontline providers heroically risking their lives treating patients during the deadly COVID-19 pandemic. Centene's actions are all too common on the part of payors," TeamHealth CEO Leif Murphy said.

"Large and profitable health insurance companies are using their market power to systematically underpay doctors, cancel contracts, and further boost their record profits," he said.

“They treated commercial insurance claims like Medicare payments, they tried to hide which company owed the money, they paid late. Their cavalier attitude toward these essential workers was abominable.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


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