McDonald Carano Litigation Team
Upends National Out-of-Network
Healthcare Reimbursement System
with $62.65 Million Jury Verdict
McDonald Carano congratulates Commercial & Complex Litigation Partners Pat Lundvall, Kristen Gallagher and Amanda Perach on serving as lead Nevada trial counsel, with assistance from Appellate Practice Partner Amanda Yen, in an industry-changing jury verdict in Clark County District Court that awarded $60 million in punitive damages and $2.65 million in compensatory damages to the Nevada affiliates of Tennessee-based TeamHealth. The Top Verdicts & Settlements/West 2021 report by ALM/VerdictSearch lists the victory as #1 largest verdict in Nevada and #9 largest verdict in the 13-state West region covering California, Nevada, Alaska, Arizona, Colorado, Hawaii, Idaho, Montana, New Mexico, Oregon, Utah, Washington, and Wyoming.
Their local clients are three Nevada-based affiliated emergency room provider practice groups (Fremont Emergency Services Mandavia Ltd. serving the Las Vegas area, Team Physicians of Nevada-Mandavia PC serving Fallon, and the parent company of Ruby Crest Emergency Medicine serving Elko) who filed suit in 2019 against UnitedHealthcare for underpaying out-of-network emergency room healthcare providers. “Winning this trial was critical because it sets the stage for TeamHealth’s successful litigation strategy across the country. TeamHealth needed a winning team of attorneys and we needed a litigation powerhouse firm that knows how to win in Nevada. This case is a bellwether and McDonald Carano was instrumental in our victory,” said Carol Owen, Chief Counsel for Commercial Litigation and Revenue Payment Integrity at TeamHealth.
The case is Fremont Emergency Services (Mandavia), et al. vs. UnitedHealth Group, Inc. et al., case number A-19-792978-B.
“As the largest healthcare insurer in the U.S. with over 70 million members and $257 billion in revenue, UnitedHealthcare’s loss achieved a landmark victory for emergency room healthcare providers subject to EMTALA, the federal act obligating these providers to perform stabilizing care regardless of ability to pay to every patient who presents with a health emergency. The trial success may begin to counter-balance the enormous power healthcare insurers, like United, have unscrupulously exercised against these critical first responders who perform an important public need. While these first responders are performing front line functions in communities across our nation certain insurers have lowballed reimbursement rates being paid to these emergency room healthcare providers knowing well the providers have no means to protect themselves against such predatory treatment other than the legal system. The impact of the jury’s verdict should go far beyond the case itself; the jury sent a powerful message that it is time to correct an unconscionable humanitarian wrong and fix a gross business inequity,” said Pat Lundvall, Chair of McDonald Carano’s Commercial & Complex Litigation Practice.
After five days of jury selection, Pat Lundvall presented opening statement before Eighth District Court Judge Nancy Allf in Las Vegas in the closely watched trial that involved a highly anticipated view into UnitedHealthcare’s reimbursement rate system. A TeamHealth press release explains that “The Nevada trial should be the most significant view behind the managed care curtain in recent history.” Covering Pat’s opening statement, The Texas Lawbook reported that “eyeballs across the country are on the trial” and “although the lawsuit at its core is about money, lawyers for TeamHealth said during opening statements that the litigation could, on a broader level, impact the overall quality of emergency physician care.” The article quoted Pat’s opening statement that “In business cases, they’re about passing money from one corporate pocketbook to another, but this case is about a little bit more; it’s about the quality of healthcare in Nevada.” Pat presented a slide to jurors showing UnitedHealthcare paid Nevada providers at the lowest rate in the Nation and then paid other Nevada emergency room providers an average of $528 per visit but paid TeamHealth doctors $247, cutting reimbursement to out-of-network providers by more than half from 2017 to 2020.
Unanimous Verdict in Favor of TeamHealth
After more than three weeks of testimony and two days of deliberation, the jury unanimously found UnitedHealthcare liable for breach of contract, unjust enrichment and two forms of unfair insurance practices and then awarded $60 million in punitive damages after awarding $2.65 million in compensatory damages. The jury found the evidence clear and convincing of UnitedHealthcare’s guilt of oppression, fraud and malice. $20 million in punitive damages was awarded to each of the three emergency room provider groups that sued UnitedHealthcare and its affiliates. The jury’s punitive damages award reflects the seriousness, severity and reprehensibility of UnitedHealthcare’s underpayment of emergency room doctors as well as the jury’s desire to deter similar conduct.
A Bellwether Victory from Winning Trial Prep
For 2 ½ years, McDonald Carano worked diligently and tirelessly for TeamHealth in preparing the case for trial. Our litigators conceived and directed all discovery; drafted, argued and won all of their 55 substantive pretrial motions; successfully convinced the court to sanction UnitedHealthcare with an adverse inference in the form of a jury instruction that was critical in closing arguments; and, with assistance from Amanda Yen in our Appellate Practice, drafted and successfully opposed UnitedHealthcare’s two petitions for writ review and two motions to stay before the Nevada Supreme Court that UnitedHealthcare had attempted to use to prevent the case from being tried promptly. McDonald Carano also drafted the briefs and Pat argued a critical case before the Ninth Circuit Court of Appeals that established new precedent on ERISA preemption (Employee Retirement Income Security Act of 1974). Without a victory in that case, all cases across the nation brought by TeamHealth against UnitedHealthcare and other insurance carriers were at risk of being dismissed.
McDonald Carano also achieved the first production orders for crucial information which may be used in nine other similar cases TeamHealth has brought against UnitedHealthcare across the country. The ten lawsuits are only part of the 45 total lawsuits TeamHealth has filed against insurers across the U.S regarding emergency care physician billing rates. The Nevada case also is the first dispute to go to trial against a major insurer involving group healthcare plans that companies offer to employees through commercial insurers. In addition to McDonald Carano as Nevada trial counsel, the TeamHealth litigation team included TeamHealth’s Carol Owen, attorneys from Miami-based Lash & Goldberg and attorneys from Houston-based Ahmad Zavitsanos Anaipakos.
Nationwide coverage of the trial includes:
- “As surprise billing ban nears, doctors and hospitals scramble to delay federal law,” USA Today, 12/11/2021
- “Nevada jury: Health insurers owe ER doctors $60M in damages,” Associated Press, 12/7/2021
- “TeamHealth wins $60 mln in underpayment suit against UnitedHealthcare,” Reuters, 12/8/2021
- “UnitedHealthcare Hit with $60M Punitive Verdict in Nevada Suit by ER doctors,” The Texas Lawbook, 12/7/2021
- “UnitedHealthcare must pay TeamHealth $62 million for shortchanging clinicians, jury says,” Modern Healthcare, 12/7/2021
- “United Healthcare owes $60M to ER doctors, jury rules,” Las Vegas Review Journal, 12/7/2021
- “Nevada jury says health insurer undercut ER reimbursements,” Associated Press, 12/1/2021
- “TeamHealth Trial: A Threat, A Delay, A Juror Down,” The Texas Lawbook, 11/9/2021
About McDonald Carano
McDonald Carano has been shaping Nevada’s legal, business, and policy landscape since our founding in 1949. With more than 60 lawyers and government affairs professionals working from offices in Las Vegas, Reno and Carson City, we are Nevada’s law firm for business. Our local, national and global clients include Fortune 500 corporations, fast-growth and mid-market companies, entrepreneurs and startups, non-profit organizations, government entities, and high-net-worth individuals. Our attorneys deliver cross-discipline, one-stop, commercial law and government affairs counsel. Our dedication to clients, innovative thinking and practical solutions based in sound business and legal judgments are at the heart of our practice. For more information, please visit mcdonaldcarano.com or send an email to email@example.com.
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