United States District Court, S.D. Mississippi, Southern Division
MULTIPLAN, INC. and PRIVATE HEALTHCARE SYSTEMS, INC. PLAINTIFFS/ COUNTER-DEFENDANTS
STEVEN W. HOLLAND, doing business as Physical Therapy Clinic of Gulfport DEFENDANT/ COUNTERCLAIMANT
MEMORANDUM OPINION AND ORDER DENYING THE PARTIES'
MOTIONS FOR SUMMARY JUDGMENT
GUIROLA, JR., UNITED STATES DISTRICT JUDGE.
THE COURT are the  Motion for Summary Judgment
filed by the plaintiffs/counterdefendants Multiplan, Inc.,
and Private Healthcare Systems, Inc. (“PHCS”),
and the  Motion for Partial Summary Judgment filed by
the defendant/counterclaimant Steven W. Holland, doing
business as Physical Therapy Clinic of Gulfport. The parties
have fully briefed the Motions. After reviewing the submissions
of the parties, the record in this matter, and the applicable
law, the Court finds that the Motion filed by Multiplan and
PHCS should be granted in part and denied in part, and
Holland's Motion should be denied.
lawsuit arose out of a dispute between a physical therapist
and two preferred provider organizations (PPOs). The Eleventh
Circuit has explained:
In essence, a PPO is a network of health care providers
organized to offer medical services at discounted rates. The
PPO providers furnish their services at discounted rates
because they expect to receive a higher volume of patients,
i.e., participants in the welfare benefit plan offered by the
insurance company. The increase in the volume of patients is
a result of third party payors, who pay the bills for medical
services plan participants receive, directing plan
participants to providers in the PPO network through
marketing materials and financial incentives. Because third
party payors, such as insurance companies, are financially
responsible for the costs of a plan participant's covered
medical care, it is in the third party payor's best
interest for the plan participant to receive medical care
from a provider who has promised to accept a discounted fee.
The use of financial incentives and other measures to direct
plan participants to providers in the PPO is known in the
health care industry as “steerage.”
HCA Health Servs. of Georgia, Inc. v. Employers Health
Ins. Co., 240 F.3d 982, 987 (11th Cir. 2001),
overruled on other grounds by Doyle v. Liberty Life
Assur. Co., 542 F.3d 1352 (11th Cir. 2008). “A
silent PPO is a term of art for a kind of PPO abuse.
Essentially, a silent PPO occurs when a payor receives a PPO
discount to which he is not entitled.” Roche v.
Travelers Prop. Cas. Ins. Co., No. 07-CV-302-JPG, 2008
WL 2875250, at *1 (S.D. Ill. July 24, 2008).
parties do not dispute the following facts:
1. Holland was at all material times a board-certified
licensed physical therapist in the state of Mississippi.
2. Holland owned and operated a small-business physical
therapy practice, Physical Therapy Clinic of Gulfport
(“PT Clinic of Gulfport”), located in Gulfport,
3. Holland was the only physical therapist at PT Clinic of
Gulfport, and he performed all patient care.
4. Multiplan and PHCS operated as PPOs.
5. Holland entered into a “PHCS Participating
Professional Agreement” with PHCS, which had an
effective date of September 1, 2006.
6. At the time Holland entered into the PHCS Agreement, he
understood it to apply to standard group health insurance.
Consistent with that understanding, PHCS did not offer
workers' compensation network products at the time the
agreement was entered into.
7. On October 18, 2006, Multiplan acquired PHCS as a wholly
8. Subsequent to Multiplan's acquisition of PHCS,
Multiplan and PHCS continued to operate as separate
9. At all material times subsequent to Multiplan's
acquisition of PHCS, the PHCS Network continued to exist as
the PHCS Network, and PHCS continued to operate and maintain
the PHCS Network. Likewise, subsequent to its acquisition of
PHCS, Multiplan operated and/or maintained the Multiplan
10. On or about June 26, 2007, PHCS sent a letter to Holland
stating that Multiplan had acquired PHCS on October 18, 2006,
and that PHCS was “expanding [Holland's] PHCS
relationship to include participation with Multiplan on a
complimentary basis.” (See Holland's Mot.,
Exhibit 13 to Ex. B, ECF No. 228-2). In the section entitled
“Changes to Your Contract, ” the letter stated
that Holland's “existing individual agreement with
[PHCS] continues in effect.” (Id.)
11. On or about September 20, 2010, Multiplan entered into a
contractual agreement with Healthcare Solutions, Inc., on
behalf of itself and its affiliates Cypress Care, Inc., and
Procura Management, Inc. Under this agreement, Procura is
required to pay fees to Multiplan in exchange for renting
access to the PPO discount rates designated by Multiplan in
the Directory of Network Providers created by Multiplan and
made available to Procura and its clients on Multiplan's
website and distributed in a monthly file.
12. On April 25, 2011, Multiplan sent a letter to Holland
stating that Multiplan had acquired Viant, Inc. in March 2010
and had since been “finalizing [its] plan to integrate
Viant's Beech Street network into Multiplan's network
offerings.” In the section entitled “Your
Participation with Multiplan, ” the letter states,
among other things, that “[y]our individual contract
with Multiplan continues in effect, ” and that
“[o]ver the next 6-24 months, commercial clients
accessing Beech Street will move their health plan members to
Multiplan's network products which will significantly
expand your access to patients.” (Compl., Ex. B, ECF
13. On or about September 1, 2011, Multiplan entered into a
contractual agreement with Coventry Healthcare Workers'
Compensation, Inc. Under this agreement, Coventry pays fees
to Multiplan in exchange for renting access to the PPO
discount rates designated by Multiplan in a “Provider
List” it sends to Coventry on a monthly basis.
14. In approximately November or December 2011, Holland began
noticing that certain EOBs accompanying payments he received
from workers' compensation payers reflected that PPO
discounts had been applied to claims for workers'
compensation services, and that Multiplan was identified as
the source of the PPO discounts.
15. Holland disputed the discounts, but his efforts were
16. After multiple unsuccessful attempts to resolve the
disputes personally, Holland retained Kevin Barrett, doing
business as Quest Financial Recovery Services, ...