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Tenn. firm barred from pursuing alleged overpayments

The case against Health Research Insights remains open, but it appears the bill recovery company has suspended or stopped its operations entirely.

By Emily Berry — Posted Aug. 2, 2010

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A Tennessee judge has ruled that the firm Health Research Insights can't pursue supposed "overpayments" from physicians on behalf of the Nashville school system's health plan.

On July 7, a Circuit Court judge for Nashville-Davidson County, Tenn., ruled partially in favor of a pediatrician and ophthalmologist, along with the Tennessee Medical Assn., ordering the bill recovery company to stop attempting to collect funds from doctors it claims overbilled for care.

The decision comes more than a year after the medical association filed the lawsuit in June 2009.

The court's decision was an order granting partial summary judgment in the physicians' favor.

Among other things, the question of whether the doctors suing HRI actually had overcharged for care, remains before the court.

Though the case isn't over, it does appear that Health Research Insights hasn't attempted to collect alleged overpayments from physicians for a while.

Texas Medical Assn. spokesman Brent Annear said physicians in that state haven't heard from HRI since initial complaints in 2009, and association officials say it appears that the company has closed up shop, based on conversations with its former customers.

Yarnell Beatty, director of legal and government affairs at the Tennessee Medical Assn., said his state's physicians haven't reported hearing from HRI in several months, and other state medical associations haven't reported any complaints, either.

HRI chief executive Theodore Perry, PhD, did not return phone messages seeking comment by this article's deadline. In his voice mail, Perry identifies himself under a different company name, even though American Medical News dialed the phone number listed on the HRI website.

Beatty declined to say whether he was working with HRI's attorneys to settle the lawsuit and said the next step in the case would be to depose HRI's executives. "Either party could appeal the ruling, and that's something that we'll have to evaluate."

Earlier in 2010, Beatty said, HRI withdrew a countersuit it had filed claiming that the plaintiffs were interfering with its business and that physicians were involved in price-fixing through a "cozy" relationship with Blue Cross Blue Shield of Tennessee.

Physicians in Tennessee were among the first to receive letters from HRI in February 2009. The letters were sent on behalf of the Metropolitan Nashville Board of Public Education, seeking repayment for claims that HRI alleged were paid at too high a rate. In some cases the claims in question were 2 or 3 years old. The letters demanded either proof that the physician had not overcharged or else immediate payment to "settle" the matter.

HRI also was working for the paper firm Georgia-Pacific and other large self-insured employers, and tried to collect from physicians in Georgia, Kentucky and Texas. HRI suspended its work at those employers' request in many cases after physicians complained about the letters, which some found overly aggressive and misleading.

HRI promised that it could recoup some of the money its customers already had spent on medical care, based on a formula it used to determine what percentage of claims were billed at too high a rate. HRI did not examine individual claims. It ran an algorithm through aggregated historic claims data that produced an estimate of overpayments.

In the case of the Metropolitan Board of Public Education, however, Circuit Judge Thomas Brothers cited a state attorney general's opinion released in September 2009, which found that local government self-insured health plans qualify as "health insurance entities" under state law, and thus are subject to the law limiting overpayment recoupments to 18 months after the original payment.

Whether nongovernment self-insured plans like Georgia-Pacific's employee health plan are subject to state insurance law in this matter was not answered.

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