Team Health Lawsuit: UnitedHealthcare Verdicts and FCA Settlements

A TeamHealth lawsuit rarely comes alone. The Blackstone-owned physician staffing company is fighting on several fronts at once: a landmark reimbursement war with UnitedHealthcare that has reached the U.S. Supreme Court’s doorstep, federal False Claims Act settlements totaling more than $100 million, active upcoding class actions filed by counties and municipal health plans, a patient billing class action in California, and fallout from a physician strike in Detroit. Several of the biggest cases remain unresolved as of late 2025 and 2026.

The UnitedHealthcare Reimbursement Battle

The most consequential litigation involving TeamHealth is its ongoing fight with UnitedHealthcare over how much insurers must pay for out-of-network emergency care. The disputes began after contract talks collapsed and TeamHealth became out-of-network for United members on July 1, 2017.¹

The Nevada Verdict

Three TeamHealth-affiliated emergency physician groups sued United in April 2019 in Clark County, Nevada, alleging systematic underpayment of thousands of emergency claims. At issue were 11,563 disputed claims submitted between July 2017 and January 2021. TeamHealth billed $13.24 million for those claims; United reimbursed $2.84 million.¹ Trial testimony indicated United sometimes paid as little as 20% of billed charges and used a “Shared Savings Program” that took up to a 50% administrative fee on the gap between billed amount and payment.²

After a 15-day trial, the jury on December 7, 2021, found “clear and convincing” evidence of “oppression, fraud and malice” and returned a $62.65 million verdict: $2.65 million in compensatory damages and $60 million in punitive damages, split equally among the three plaintiff groups.³

The Nevada Supreme Court Ruling and Supreme Court Petition

On June 12, 2025, the Nevada Supreme Court issued a mixed decision on United’s appeal. It affirmed the jury’s unjust enrichment finding, holding that a medical provider has a valid claim when an insurer fails to pay the reasonable value of emergency services required under the Emergency Medical Treatment and Labor Act. It also rejected United’s argument that the federal Employee Retirement Income Security Act (ERISA) preempted the claims, finding the dispute involved the “amount of payment” rather than plan administration.¹

But the court reversed the finding of an implied contract, vacated the $60 million punitive award for recalculation, and reversed awards for prejudgment interest and attorney fees under the state’s Prompt Pay Act. It also ruled that Nevada’s Unfair Claims Practices Act does not create a private right of action for medical providers.¹

United then sought U.S. Supreme Court review, filing an application on July 29, 2025, for extra time to petition for certiorari. It argues that ERISA preempts state-law unjust-enrichment claims by out-of-network providers against ERISA plan administrators, and that the Nevada decision conflicts with rulings from the Second, Third, and Fifth Circuits.⁴ Justice Kagan extended the filing deadline to October 10, 2025.⁵

Florida Arbitration and Other Payment Cases

Beyond Nevada, a three-judge arbitration panel in Tampa ruled in December 2022 that United had underpaid TeamHealth subsidiary Gulf-to-Bay Anesthesiology Associates for care provided between 2017 and 2020, finding clinicians were paid only 30% of “fair compensation.” The panel awarded $10.8 million plus expected prejudgment interest. At that time, eight additional payment lawsuits against United were pending in various jurisdictions, and TeamHealth’s chief clinical officer stated settlement payments from United across multiple suits had reached “some half a billion dollars.”⁶

United’s $100 Million Countersuit

United has also gone on the offensive. In October 2021 it filed suit in the Eastern District of Tennessee alleging TeamHealth had engaged in a systematic “upcoding” scheme, billing for higher-level emergency services than were actually provided, amounting to over $100 million in fraudulent claims.⁷ United alleged that roughly 60% of claims TeamHealth submitted using the two highest-level ER billing codes should have been billed at lower levels. As one example, TeamHealth charged $1,712 for a patient treated for indigestion after eating a chili dog, coding the visit as “high complexity.”⁸

United alleged the practices escalated after Blackstone’s 2017 acquisition, characterizing the shift as moving from “aggressive profit maximization to fraud.”⁷ TeamHealth CEO Leif Murphy called the suit “frivolous,” saying courts had “repeatedly dismissed these claims in other jurisdictions.”⁸ The case remains active as of late 2025, with Judge Clifton Corker resolving a November 2025 discovery dispute in United’s favor.⁹

Federal False Claims Act Settlements

The IPC Healthcare $60 Million Settlement

In February 2017, TeamHealth agreed to pay $60 million plus interest to settle allegations that its subsidiary IPC Healthcare had violated the False Claims Act by systematically overbilling Medicare, Medicaid, the Defense Health Agency, and the Federal Employees Health Benefits Program. The government alleged IPC encouraged hospitalists to maximize billings and pressured physicians with lower billing levels to “catch up” to their peers.¹⁰

The case began as a whistleblower suit filed by Dr. Bijan Oughatiyan, a former IPC physician, in the Northern District of Illinois. He received approximately $11.4 million as his share of the recovery. TeamHealth entered into a five-year corporate integrity agreement with the Department of Health and Human Services Office of Inspector General covering its hospital medicine division. The settlement did not include a determination of liability.¹⁰

The Texas $48 Million Whistleblower Settlement

A separate False Claims Act case filed in the Eastern District of Texas in 2016 by two former employees, Caleb Hernandez and Jason Whaley, alleged that TeamHealth “routinely billed for nonexistent doctor examinations and critical care services.” Federal and state governments declined to intervene, and the case was unsealed in 2018. It settled in July 2021, with TeamHealth agreeing to pay $48 million to the United States and the whistleblowers.¹¹

Upcoding Class Actions by Employers and Local Governments

Upcoding allegations have also come from health plan sponsors on their own behalf.

Louisiana Municipal Workers

The Louisiana Municipal Risk Management Agency, a self-funded workers’ compensation plan covering municipal employees such as police officers and firefighters, filed a class action in the Eastern District of Tennessee alleging that TeamHealth systematically inflated billing codes for emergency department services. The complaint described centralized coders at subsidiary HCFS Health Care Financial Services assigning inflated codes without input from treating physicians, then submitting the claims in the names of local practice groups rather than under the TeamHealth name. One emergency physician quoted in the complaint said: “As an emergency medicine physician, I have absolutely no idea to whom or how much is billed in my name.”¹² The case was dismissed in November 2022 after a federal judge ruled the plaintiff lacked standing to sue.¹³

Buncombe County and City of Plaquemine

In November 2022, Buncombe County, North Carolina, filed a class action in the Eastern District of Tennessee on behalf of approximately 1,500 county employees covered under its health plan. The county alleged deliberate upcoding, with patient status codes inflated to the highest level to justify charges beyond what patients required. A 2021 county investigation found that 60% of all admissions at TeamHealth-served facilities were coded at the highest level.¹⁴ TeamHealth denied the allegations, stating its coding results aligned with CMS patterns.

In January 2024, Judge Clifton Corker denied TeamHealth’s motions to dismiss, to strike the class allegations, and to stay discovery. The case remains active as of mid-2026. A related class action filed by the City of Plaquemine, Louisiana, raising similar upcoding allegations, is also pending before the same judge, and the court has considered consolidating the two for class discovery purposes.¹⁵

The HCA Healthcare Whistleblower Case

Two longtime emergency physicians at Mission Hospital in Asheville, North Carolina, Allen Lalor and Scott Ramming, filed a False Claims Act lawsuit in June 2022 against both HCA Healthcare, which owns Mission Health, and TeamHealth. The suit, filed in the Western District of North Carolina, alleged the companies defrauded Medicare and Medicaid by intentionally inflating patient costs through the widespread, medically unnecessary activation of “trauma alerts” and “sepsis alerts” to trigger higher billing. The physicians also alleged that redundant diagnostic tests were ordered and that non-physician staff were pressured to use these protocols to boost revenue.¹⁶ The case was unsealed on April 6, 2023, after the federal government declined to intervene. The Department of Justice retained the option to join the case at a later date.¹⁷

Patient-Facing Lawsuits

The California Billing Class Action

On July 10, 2020, a class action was filed in the Northern District of California on behalf of uninsured and out-of-network patients who alleged TeamHealth billed them at “artificially inflated” rates far exceeding the reasonable market value of the services they received. Sia Fraser v. Team Health Holdings, Inc. brought claims under RICO, the California Unfair Competition Law, and the California Legal Remedies Act.¹⁸ The complaint alleged that patients never agreed to pricing with TeamHealth before treatment and that the company knew its billed rates were unenforceable in court, where equitable doctrines would limit recovery to a fraction of the amount demanded. TeamHealth called the claims “wholly without merit.”¹⁹

Shelby County Debt Collection Reversal

A 2019 investigation by MLK50 and ProPublica found that TeamHealth subsidiary Southeastern Emergency Physicians had filed more than 4,800 lawsuits against patients in Shelby County, Tennessee, General Sessions Court between 2017 and late 2019. While patient visits to three local emergency departments grew by 12% between 2016 and 2018, the number of collection lawsuits grew by 132%. Former employees said they had been instructed not to mention charity care options to patients calling about their bills.²⁰

After the reporting, TeamHealth announced in November 2019 that it would stop filing lawsuits against patients and would not pursue pending cases. Effective December 1, 2019, the company introduced a new financial policy offering discounts of up to 90%, and in some cases 100%, to uninsured patients, and committed to including charity care eligibility criteria on all future invoices. Blackstone said it had not been involved in the collection practices but agreed with the decision to stop them.²⁰

The Detroit ER Strike and Contract Loss

TeamHealth has also faced conflict with its own clinicians. At Ascension St. John Hospital in Detroit, where TeamHealth had managed the emergency department since 2015, roughly 43 emergency physicians and advanced practice providers unionized in 2023 as the Greater Detroit Association of Emergency Physicians, citing concerns over staffing, working conditions, and patient wait times that doctors said stretched to 15 or even 17 hours.²¹

After months of negotiations, the physicians held a 24-hour unfair labor practice strike beginning April 18, 2024.²² TeamHealth said it had “negotiated in good faith” and disputed the union’s characterization of the talks.²³

Weeks later, Ascension announced it would not renew its contract with TeamHealth, ending the arrangement effective August 31, 2024. Michigan-based Independent Emergency Physicians was selected as the replacement. The 42 unionized ER doctors were informed via a five-minute Zoom call in early June 2024 and told they would need to reapply for their own positions with the incoming provider.²¹

Congressional Scrutiny

In April 2024, Senator Gary Peters, then chairman of the Senate Homeland Security and Governmental Affairs Committee, launched an investigation into private equity ownership of emergency department staffing companies, targeting Blackstone and TeamHealth alongside Apollo Global Management and KKR.²⁴ The investigation was based on committee staff interviews with more than 40 emergency medicine physicians who raised concerns about patient safety, improper billing, retaliation against clinicians, and anti-competitive practices.²⁵

The committee requested documents with a deadline of April 17, 2024, and meetings by May 3, 2024. TeamHealth said it was “reviewing the letter” and remained committed to “delivering high-quality, safe patient care.”²⁴ No published hearing outcomes or final reports have been released.

The Debt Load Behind the Litigation

The financial pressure from Blackstone’s leveraged buyout has shaped the environment in which these cases unfold. Facing over a billion dollars in looming debt maturities, TeamHealth secured a $1.23 billion financing package in August 2023, consisting of $750 million in new first-lien notes and a $475 million accounts receivable facility.²⁶ In July 2024, the company completed a broader recapitalization, refinancing all $714 million of its senior unsecured notes due February 2025. Blackstone contributed $200 million in new equity and converted a $70 million payment-in-kind loan into equity.²⁷

S&P upgraded the company’s credit rating to ‘B-‘ from ‘CCC’ in August 2024, and Fitch upgraded it to ‘CCC+’ from ‘CCC-‘. The company must still reduce its $1.4 billion 2027 term loan to $500 million by the fourth quarter of 2026 or face accelerated maturities on other debt. Fitch noted that while operating fundamentals were recovering, the company remains in “outlier” leverage territory, with continued risk of a distressed debt exchange if it cannot meet those targets.²⁸

1
FindLaw. Fremont Emergency Services (Mandavia) v. UnitedHealthcare, Nevada Supreme Court
2
Healthcare Finance News. TeamHealth Wins Lawsuit Against UnitedHealth
3
McDonald Carano. McDonald Carano Litigation Team Upends National Out-of-Network Healthcare Reimbursement System With $62.65 Million Jury Verdict
4
U.S. Supreme Court. UnitedHealth Application for Extension of Time to File Certiorari Petition
5
Miller & Chevalier. United v. Fremont Emergency Services, Petition for Writ of Certiorari
6
Healthcare Dive. UnitedHealthcare TeamHealth Lawsuit Florida Billing
7
Fierce Healthcare. UnitedHealth Lawsuit Claims TeamHealth Upcoded Claims for $100M Fraud
8
Healthcare Finance News. UnitedHealth Sues TeamHealth Saying It Overpaid $100 Million in Claims
9
BenefitsPRO. UnitedHealthcare Prevails in Battle Over Access to Affiliate Billing in Upcoding Lawsuit
10
U.S. Department of Justice. Healthcare Service Provider to Pay $60 Million to Settle Medicare and Medicaid False Claims Act Allegations
11
FindLaw. United States ex rel. Hernandez v. Team Finance, L.L.C.
12
KFF Health News. Louisiana Municipal Risk Management Agency v. Team Health Holdings, Inc., Second Amended Class Action Complaint
13
Modern Healthcare. TeamHealth Louisiana Billing Lawsuit Dismissed
14
WLOS. Buncombe County Files Suit Alleging Over-Billing at WNC Emergency Department Facilities
15
CourtListener. Buncombe County, North Carolina v. Team Health Holdings, Inc.
16
North Carolina Health News. Doctors Lawsuit: HCA Healthcare, TeamHealth Overcharged Patients
17
Medscape. HCA Healthcare and TeamHealth Accused of Overcharging Patients
18
KFF Health News. Sia Fraser v. Team Health Holdings, Inc., Class Action Complaint
19
HealthLeaders Media. TeamHealth Faces Class Action Lawsuit Over Hospital ER Billing Fraud
20
NPR. A Private-Equity-Owned Doctor’s Group Sued Poor Patients Until It Came Under Scrutiny
21
Michigan Public. Detroit ER Docs Must Re-Apply for Their Own Jobs After Controversial Staffing Company Fired
22
ACEP Now. The ER Docs Strike Back
23
MedPage Today. Ascension St. John Hospital Emergency Department Strike
24
NBC News. Senate Questions Private Equity Hospital Emergency Departments
25
U.S. Senate Committee on Homeland Security and Governmental Affairs. Peters Seeks Information About Private Equity-Run Emergency Departments and Impact on Patient Care
26
Bloomberg Law. Blackstone-Backed TeamHealth Scores $1.23 Billion New-Money Deal
27
S&P Global Ratings. TeamHealth Issuer Credit Rating Upgrade
28
Fitch Ratings. Fitch Upgrades Team Health Holdings IDR to CCC+ Upon Partial Recapitalization