• Two Texas State District Courts have decided the Texas Prompt Pay Act (TPPA) applies to Texas insurers administering claims for services arising out of self-funded health insurance plans submitted to them for payment by Texas healthcare providers.
• One Texas Federal District Court has decided the TPPA applies only to Texas insurers administering claims for services arising out of fully insured health insurance plans submitted to them for payment by Texas healthcare providers.
• One Texas Federal District Court has decided that actions brought against Texas insurers by Texas healthcare providers under the TPPA relating to claims for services arising out of self-funded health insurance plans are not preempted by the Employee Retirement Income Security Act of 1974 (ERISA).
• The two Federal District Court opinions referenced above are currently on appeal to The United States Court of Appeals for the Fifth Circuit in New Orleans.
Texas healthcare providers (i.e. doctors and hospitals) and the health insurance industry dispute the breadth of the TPPA. Providers generally believe the TPPA applies to Texas insurers administering claims for healthcare services arising out of all health insurance plans, except what is explicitly excluded by the TPPA–claims arising out of Medicaid and the Texas Children’s Health Insurance Program (CHIP). The insurance industry argues the TPPA applies to only a small minority of healthcare claims in the State of Texas, namely, claims arising out of fully insured healthcare plans that are issued by the Texas insurer that is also administering the claims.
Most TPPA disputes between providers and insurers are resolved through private arbitrations due to the presence of arbitration clauses in the contracts between the providers and insurers (Provider Agreements) under which providers submit their claims for services for payment to the insurers. A few providers, however, do not have arbitration clauses in their contracts. TPPA disputes by these providers are resolved through the court system. In two such cases, both against Aetna, Texas State District Courts (the 17th District Court in Tarrant County (Judge Melody Wilkinson) and the 44th District Court in Dallas County (Judge Carlos Cortez)) decided the TPPA applies as asserted by providers; it applies to insurers administering claims arising out of self-funded health insurance plans in addition to it undisputedly applying to insurers administering claims arising out of fully insured plans. The Tarrant County case is being handled by Watts Guerra LLP on behalf of Texas Health Resources and is set for trial in December 2015; Judge Wilkinson issued her opinion in October 2014. The Dallas County case was brought by a provider not represented by Watts Guerra LLP; it was resolved some time after Judge Cortez issued his opinion in January 2014.
Judge Jane Boyle of The United States District Court for the Northern District of Texas, Dallas Division, decided in January 2015, in Health Care Service Corporation [Blue Cross and Blue Shield of Texas] v. Methodist Hospitals of Dallas, the TPPA does not apply to Texas insurers when they are administering claims arising out of non-fully insured health insurance plans (i.e. it only applies to Texas insurers administering claims arising out of fully insured plans, which is agreed by providers and the insurance industry). On behalf of Methodist, Watts Guerra LLP is appealing Judge Boyle’s decision to The United States Court of Appeals for the Fifth Circuit in New Orleans.
Judge Barbara Lynn of The United States District Court for the Northern District of Texas, Dallas Division, decided in March 2015, in Aetna Life Ins. Co. v. Texas Health Resources and Methodist Hospitals of Dallas, the TPPA is not preempted by ERISA when applied to Texas insurers administering healthcare claims for services by providers arising out of self-funded health insurance plans. Aetna is appealing Judge Lynn’s decision to The United States Court of Appeals for the Fifth Circuit. Watts Guerra LLP will be responding to Aetna’s appeal on behalf of THR and Methodist.
The Fifth Circuit has decided to hear the appeals of both cases as related matters.
Written by*:
William J. “Will” Maiberger, Jr.
WATTS GUERRA LLP
4 Dominion Drive, Bldg 3, Suite 100
San Antonio, Texas 78257
Office (210) 447-0500
Email: wmaiberger@guerrallp.com
*This information is provided to supply relevant information concerning the subject matter of this article, and should not be received as legal advice. Legal advice is only given to persons or entities with whom Watts Guerra LLP has established an attorney-client relationship. Available causes of action and remedies vary from case to case and depend on the underlying facts of each. If you have another lawyer, you should consult with your own attorney, and rely upon his or her advice, rather than the information contained herein.
© Watts Guerra LLP 2015
