United States District Court, S.D. Texas
AMENDED OPINION ON JUDGMENT
N. Hughes United States District Judge.
1998, Paragon Ambulatory Health Resources, LLC, and its
related businesses engaged Physicians Auditing &r Billing
Services, Inc., for its billing and collections. The Paragon
companies supplied mobile anesthesia during minor, in-office
gynecological procedures. In 2010, Paragon began to issue
is a board-certified anesthesiologist. In 2010, he acquired a
Paragon franchise. He also owns these Paradigm entities:
Paradigm Ambulatory Medical Services, PA
Paradigm Services, LLC
Paradigm Anesthesia Services, PA
Complete Anesthesia Services, PA
Paradigm Ambulatory Associates, LLC
Life Insurance Company issues group insurance policies,
including those that fund employer-sponsored health-benefit
plans. It also serves as a third-party administrator for
self-funded health plans. In either case, the insured
receives specified benefits for covered health expenses - as
defined by the plan. Aetna processes and pays claims.
plans distinguish between medical providers who have a fee
agreement with it and those who do not. Those providers who
are covered by an agreement are called in-network; the others
are obviously out-of-network. Medical billing levels have
considerable variability by geography - urban or suburban,
nature of the service, and administrative burden. With many
services, Aetna agrees to pay bills submitted by those that
commit to a fee schedule. Both categories of services must
comply with the non-price conditions of the plans. Some of
these are that the providers must collect co-pays and
deductibles, and charge reasonable fees for necessary
joining Aetna's network, Aetna can reliably and quickly
evaluate and pay claims. This reduces both sides'
administrative costs, and it accelerates their cash flows.
Further, a patient who gets care from an out-of-network
provider is likely to pay more than if he were using a
network one. The non-network charge commonly exceeds
Aetna's estimate of the reasonable market value for the
and Yi have not agreed to a fee schedule. None of Yi's
affiliates has agreed. They are all out-of-network providers.
a billing model that was developed by two people: (a) Paragon
Ambulatory Health Resources's owner, Neal Fisher, and (b)
Physicians Auditing's owner, Vicki White.
established the Paradigms to submit medical bills under a
range of tax identification numbers and names. For each
patient seen, Yi would present two claims to Aetna: (a) a
professional fee to administer the anesthesia and (b) a
facility fee. Paradigm would bill Aetna $10, 000 to $15, 000
per procedure, while billing the patients $600. Paragon would
collect a royalty and other fees based mostly on a percentage
of Yi's collections; Physicians Auditing took eight
percent of Yi's collections.
requires that medical services only charge proper,
reasonable, and medically necessary fees. They are barred
from knowingly (a) presenting a false claim for payment under
an insurance policy and (b) charging two different prices for
the same ...