Dealing With the ‘AR Dump’: Don’t Accept the Spreadsheet

August 21, 2017

“AR dump” cases involving thousands of medical claims are on the rise. The standard playbook is for the provider to run its accounts receivable report and file a summary complaint or arbitration demand alleging the total amount due or, in some cases, attaching the AR report containing a list of the amounts due but lacking detail including the claim number, patient name, date of service, service provided, description of the breach, or the contract provision or provisions at issue.

When facing such a summary complaint, do not necessarily accept it. Instead, consider moving to dismiss it for failure to state sufficient facts demonstrating what amounts to thousands of alleged breaches.

McGuireWoods lawyers recently dealt with this scenario in Cook County, Illinois, involving more than 105,000 patient accounts that a hospital system alleged were improperly underpaid or denied, totaling $40 million. After the hospital filed a complaint against the health plan generally alleging breach of contract, the McGuireWoods legal team moved to dismiss, asserting that each of the 105,000 claims was a separate alleged breach of contract and Illinois fact-pleading requirements require facts to be pled for each allegation.

In response, the hospital attempted to improve its pleading by attaching a spreadsheet listing the 105,000 patient accounts, including patient name, ID number, dates of service, expected reimbursement, payment amount and the amount allegedly owed. The hospital did not, however, identify the services rendered, the claim numbers, the date each claim was submitted, or other service-identifying information. Nor did the hospital identify the health plan’s alleged breach or the contract provisions allegedly breached.

McGuireWoods’ legal team attacked this newly filed pleading, arguing that it was still insufficient because each of the alleged 105,000 claims was an independent alleged breach of contract. Therefore, the hospital needed to allege the factual basis for each one. After oral argument, the court struck the pleading and ordered the hospital to submit more detailed information for each of the patient accounts at issue. 

The practical takeaway: Don’t be afraid of attacking the sufficiency of the pleadings when every single claim/patient account presents a unique set of circumstances. Indeed, each and every claim could be brought as an independent alleged breach or other claim, and that does not change simply because there are thousands at issue.