This is the case of TeamHealth Holdings Inc. et al. v. Ironshore Specialty Insurance Co. et al., in the U.S. District Court for the Eastern District of Texas.

Team Health Holdings Inc., a medical staffing business says it is owed $10 million in excess insurance coverage to help compensate for what it has already paid to settle an over-billing lawsuit bought by the government in 2016.

Attorneys for TeamHealth allege that a Liberty Mutual unit ignored them for several months before it refused to fund the settlement agreement.

TeamHealth is represented by attorneys Jennifer H. Doan and Kyle R. Akin of Haltom & Doan and J. Alexander Purvis and E. Todd Presnell of Bradley Arant Boult Cummings LLP.

TeamHealth also argued in its complaint that Ironshore Specialty Insurance Co. should pay out the total limit for their excess professional liability coverage to assist in funding a $42.5 million settlement that the staffing company reached to resolve the underlying suit that said Team Health over-billed patients for emergency room services.

This coverage dispute originates from a lawsuit filed on behalf of the U.S. government, against TeamHealth in Texas federal court. The lawsuit accused TeamHealth of over-billing for emergency room services performed by its client hospitals in a fraudulent effort to obtain "grossly overpaid reimbursements" from sources such as Medicare and Medicaid.

TeamHealth filed a lawsuit against its insurance broker, Alliant Insurance Services Inc., claiming that the broker should be responsible for the $10 million excess insurance payment if Ironshore is not ordered to do so.

TeamHealth is a physician practice in the U.S. founded in 1979 and based in Knoxville, Tennessee, pursuing medical outsourcing, including physician staffing and billing services to emergency rooms.

Attorneys for TeamHealth said that its primary insurer, AIG has already paid its total $10 million dollar policy limit, which triggered Ironshore's coverage obligations under a $10 million excess policy.

The complaint says, "When TeamHealth asked Ironshore to provide the coverage that TeamHealth paid for, Ironshore asked questions and then 'ghosted' TeamHealth, leaving TeamHealth to fend for itself."

TeamHealth claims that Ironshore ultimately denied coverage for the settlement, but based the denial on what it called a "self-serving interpretation of notice and consent provisions despite contrary facts, law, and logic."

Attorneys for TeamHealth argue that the underlying suit was filed under seal and that it did not receive a copy of the filed complaint until September 2018, and that’s when it says it notified its insurers.

However, TeamHealth did say that their company did receive a civil information demand related to the underlying suit in October 2016, which it forwarded to AIG and Ironshore. TeamHealth says this constituted "sufficient notice under the Ironshore policy."

According to the TeamHealth complaint, the overbilling allegations in the underlying lawsuit "fell within the scope of coverage provided by the AIG policy and followed by the Ironshore policy."

According to documents from the underlying suit, TeamHealth settled the action in July 2021 for $42.5 million.

In the complaint, TeamHealth says that AIG paid the full limits of its policy, but Ironshore "continued to stonewall TeamHealth" and refused to engage in settlement negotiations.

The company said that "Ironshore knew that a timely response was needed and required but disappeared only to show back up months too late and deny coverage outright based on its unreasonable notice defense."

The company also said that Ironshore denied coverage "by inventing purported notice and consent issues," and failed to elaborate on what those issues were.

TeamHealth is suing Ironshore for breach of contract and bad faith, as well as a declaratory judgment that the excess insurer is ordered to pay the $10 million policy limit.

The company is also suing Alliant for breach of contract, professional negligence, and breach of fiduciary duty, claiming that the broker must be forced to cover it for the $10 million policy limit, if Ironshore is not found responsible for payment.