Unreported / Non-Citable
Background
Lone Star 24Hr ER Management operates a freestanding emergency care facility and has no provider contract with Blue Cross and Blue Shield of Texas, making it an out-of-network provider for BCBSTX plans. Lone Star alleged that BCBSTX substantially underpaid—or paid nothing on—claims for emergency services provided to BCBSTX-insured patients. It asserted that the payments were below Medicare rates, in-network rates, and FAIR Health benchmarks.
The parties completed the mandatory mediation process prescribed by Chapter 1467 of the Texas Insurance Code but did not agree on the appropriate reimbursement. Lone Star then sued under Texas Insurance Code § 1467.0575 to determine the amount due and asserted a separate breach-of-contract claim based on patients’ assignments of rights under their health-benefit plans. BCBSTX moved to dismiss, challenging the statutory claim, Lone Star’s standing, the sufficiency of the contract claim, and the request for attorney fees.
The Court’s Holding
The court denied dismissal of the § 1467.0575 claim. It found that Lone Star was proceeding under that provision’s express authorization for a civil action following unsuccessful mediation, rather than asserting private causes of action under Texas Insurance Code §§ 1271.155, 1301.0053, and 1301.155. Reading Chapter 1467 as a whole, the court also rejected BCBSTX’s contention that a judicial determination of the “amount due” could not consider whether its reimbursement represented the usual and customary rate or was unreasonably low.
The court also held that Lone Star adequately alleged standing and a breach-of-contract claim based on assigned plan rights. Although the Texas Emergency Care Act protects patients from financial responsibility for disputed balances, the court concluded that this protection does not eliminate their contractual rights against BCBSTX or prevent Lone Star, as assignee, from pursuing payment allegedly owed under the plans. Because the contract claim arose from alleged plan obligations and was distinct from the statutory post-mediation claim, the court allowed it to proceed and declined to reject the attorney-fee request at this stage.
Key Takeaways
- Section 1467.0575 permits an out-of-network emergency provider to seek a judicial determination of the amount due after mandatory mediation fails.
- At the pleading stage, determining the amount due may include consideration of whether the insurer paid the usual and customary rate or an unreasonably low amount.
- Patient protections against balance billing do not necessarily eliminate assigned contractual claims against an insurer for allegedly unpaid plan benefits.
Why It Matters
The decision allows an out-of-network emergency provider to pursue both Chapter 1467’s post-mediation remedy and a distinct assigned breach-of-contract theory. It also rejects, at the motion-to-dismiss stage, an insurer’s attempt to confine the statutory proceeding in a way that would exclude reimbursement considerations used during the mandatory mediation process.