FEDERAL JUDGE STAYS PORTION OF KNOX COUNTY HOSPITAL LAWSUIT AGAINST BCBS, ORDERS BOTH PARTIES TO ARBITRATE BREACH OF CONTRACT & NON-PAYMENT CLAIMS

(Wichita Falls, TX, January 13, 2020) – A ruling by U.S. District Judge Reed O’Connor has left a portion of the Knox County Hospital District (KCHD) $21 million lawsuit against Blue Cross / Blue Shield (BCBS) pending, as both parties have been ordered to enter arbitration. The judge ordered both parties to attempt Alternative Dispute Resolution arbitration – and he stayed the remaining portions of the lawsuit pending an arbitrator’s decision.

That means that Knox County can still pursue its legal claims against BCBS if the parties are unable to reach a settlement in arbitration.

The order issued in the U.S. District Court for the Northern District of Texas, Wichita Falls, Division, concludes:

“Where all of the issues raised before the court are subject to arbitration, dismissal is permissible… Here not all of Plaintiff’s (KCHD) claims are referred (to arbitration). But since this claim is dependent on the merits of the disputes that will be arbitrated, the Court exercises its discretion to stay this case pending the arbitrator’s determination.”
– Honorable Reed O’Connor United States District Judge

The Court ruling came in response to Motions for Summary Judgement in the lawsuit (Knox County Hospital District v. Health Care Service Corporation – 7:19-cv-000995-O-ND-TX- WTFD) filed in U.S. District Court earlier in December. BCBS had filed a motion to have the entire matter sent to arbitration.

“The Board of Directors, employees and patients of Knox County Hospital could not be more pleased with Judge O’Connor’s decision to leave critical parts of this lawsuit pending, while ordering both parties into arbitration,” said Kelly Dawson, attorney for KCHD. “We appreciate the Court’s willingness to have a full hearing on the factual allegations we have asserted in the lawsuit.”

Dawson also applauded the court for moving quickly on the case which it originally filed in State District Court in September. BCBS moved to have the case moved to federal court and then filed a motion to have the lawsuit dismissed.

“The judge has made it clear that he wants this matter resolved in a timely fashion, and we will move quickly to meet his order,” Dawson said. “We’re pleased to have the option of coming back to court if we are unable to resolve some of the serious financial hardships that have been imposed on the Knox County Hospital. We want the citizens of Knox County to be fully covered before this issued is resolved.”

BCBS began with-holding payments from Knox County in 2017 – in violation of the state’s Prompt Pay Statue – and the Texas Department of Insurance (TDI) has refused to take action despite repeated complaints filed by KCHD. After a state District Judge issued a Temporary Restraining Order in September, BCBS filed to have the case heard in the Northern District of Texas Federal Court.

In its Motion for Summary Judgement filed in December, Knox County maintained that BCBS had engaged in a systematic pattern of nefarious activities, including, but are not limited to, fraud, slander, violations of the Texas Insurance Code and violations of Texas Civil Practices Code.

Knox County filed an amended complaint against Blue Cross Blue Shield in the Northern District of Texas Federal Court after the insurance giant had the case removed from state District Court in Knox County. The hospital’s complaint detailed the following causes of action against Chicago based Blue Cross Blue Shield of Texas (BCBSTX):

  • Breach of contract for failing to pay agreed upon rate
  • Violation of prompt payment laws according to the Texas Insurance Code
  • Improper recoupment from a provider in violation of Texas law
  • Retaliation
  • Business disparagement

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About Knox County Hospital District:

Knox County Hospital District provides healthcare services for residents of Knox County and surrounding areas. The hospital district offers a wealth of medical services, including 24-hour emergency care, advanced radiology services, a clinical laboratory, physical therapy, patient education and more. The Knox County Hospital is a 25-bed acute care critical access facility located in Knox City, Texas which is 78 miles north of Abilene. The District also operates two rural health clinics, an outpatient retail pharmacy, home health, emergency medical services (EMS), a nursing home and durable medical equipment (DME) services.

Contact:

Chuck McDonald
512-658-5958
Mcdonaldpr.charles@gmail.com

KNOX COUNTY HOSPITAL TO PROVIDE TREATMENT FOR BCBS-COVERED PATIENTS DESPITE INSURANCE COMPANY DROPPING HOSPITAL FROM NETWORK, EFFECTIVE JAN. 16, 2020

(KNOX CITY, TX, December 16, 2019) – The Knox County Hospital District (KCHD) Administrator Stephen Kuehler has notified all federal and state employees and retirees who have health insurance through Blue Cross Blue Shield of Texas (BCBS) that the Hospital will continue to provide treatment services to them and their family members despite the BCBS notification that it was dropping the hospital from its network.

“We will not treat the citizens of Knox County the way Blue Cross is treating us,” Kuehler said in a letter to local citizens with BCBS plans. “This hospital has been providing care for our community for more than 90years and we will continue to do so. I want to assure all government employees and retirees that we will provide all necessary treatment regardless of what Blue Cross chooses to do.”

The Knox County Hospital is the only hospital in the county and those citizens receiving healthcare coverage through government plans were notified last week – the day after the enrollment period had ended for the upcoming year – that Blue Cross would drop the Knox County Hospital from its network.

Knox County residents receiving health benefits through BCBS Federal Employee Program received notification from BCBS on December 10 that the provider was dropping Knox County Hospital from its network. Open enrollment for participants in the Federal Employee Program closed on Dec. 9, 2019.

“Notifying our citizens the day after the enrollment period ended was a callous, calculated decision made to create as much pain and suffering as possible for Blue Cross customers and this hospital,” Kuehler said.

Kuehler said that hospital attorneys had been negotiating with the Illinois-based company on an extension to its current contract, after BCBS provided it with notice that it intended to drop the hospital from its network. He said the hospital only learned of the latest BCBS action when he was contacted by distraught local residents who had been notified by the insurance giant that it was dropping the only hospital in the county from its network.

“I certainly expect the state of Texas to intervene, because BCBS has promised to provide insurance coverage in all 254 Texas counties as part of its contract with the state,” Kuehler said. “The state has an obligation to ensure that all citizens have equal access to health care.”

The Knox County Hospital is currently pursuing a lawsuit in federal court against BCBS regarding more than $21 million in unpaid claims dating back to 2017. With BCBS in violation of the state’s Prompt Pay Statue, KCHD had filed a formal complaint with the Texas Department of Insurance (TDI), which failed to take action. Finally, a state District Judge issued a Temporary Restraining Order in September against BCBS, which the insurer filed to have moved to the Northern District of Texas Federal Court in Wichita Falls.

On December 11, Knox County filed a Motion for Summary Judgement filed in federal court, maintaining that BCBS had engaged in a systematic pattern of nefarious activities, including, but are not limited to, fraud, slander, violations of the Texas Insurance Code and violations of Texas Civil Practices Code.

“This hospital is not going to be bullied by Blue Cross,” Kuehler said. “We may be a small provider, but we take our responsibility to the citizens of Knox County very serious. We’re used to being treated poorly by this company, but now they want to punish everyone who lives in this county.”

Knox County Hospital District provides healthcare services for residents of Knox County and surrounding areas. The hospital district offers a wealth of medical services, including 24-hour emergency care, advanced radiology services, a clinical laboratory, physical therapy, patient education and more. The Knox County Hospital is a 25-bed acute care critical access facility located in Knox City, Texas which is 78 miles north of Abilene. The District also operates two rural health clinics, an outpatient retail pharmacy, home health, emergency medical services (EMS), a nursing home and durable medical equipment (DME) services.

Contact: Chuck McDonald
512-658-5958
Mcdonaldpr.charles@gmail.com

KNOX COUNTY HOSPITAL FILES FEDERAL COURT MOTION

(Wichita Falls, TX, December 12, 2019) – The Knox County Hospital District (KCHD) filed its Motion for Summary Judgement in the Northern District of Texas Federal Court Wednesday in its ongoing legal battle to secure more than $21 million that has been wrongfully withheld from it by Blue Cross / Blue Shield of Texas (BCBS).

Hospital attorneys praised the court for moving quickly on the case which it originally filed in State District Court in September. BCBS moved to have the case moved to federal court. Knox County submitted its legal motion in accordance with the federal court schedule.

“We look forward to having this case heard in 2020 and are confident that the taxpayers of Knox County will be made whole by the court,” said Kelly Dawson, attorney for KCHD. “Blue Cross is blatantly in violation of the Texas prompt payment laws and has yet to offer any justification for withholding payments for more than two years.”

BCBS began with-holding payments from Knox County in 2017 – in violation of the state’s Prompt Pay Statue – and the Texas Department of Insurance (TDI) has refused to take action despite repeated complaints filed by KCHD. After a state District Judge issued a Temporary Restraining Order in September, BCBS filed to have the case heard in the Northern District of Texas Federal Court.

Kelly Dawson, attorney for the Knox County Hospital said today’s court filing was an important step forward in the effort to hold BCBS accountable.

“The Blue Cross legal strategy is pretty straight-forward,” Dawson explained. “They’ve got billions in the bank; we’re the sole healthcare provider in a county of 4,500 people, and the state of Texas isn’t going to lift a finger if they illegally withhold payment to our rural hospital… so they just don’t pay their bills.

“Blue Cross has plenty of time and money, and they’re content to delay payments until Knox County becomes the next rural hospital to go under in Texas,” Dawson said. “Nonetheless we’re going to trial early next year. The facts are on our side and we are confident that the court will order Blue Cross to pay what is owed to the Knox County Hospital District.”

In its Motion for Summary Judgement filed Wednesday, Knox County maintained that BCBS had engaged in a systematic pattern of nefarious activities, including, but are not limited to, fraud, slander, violations of the Texas Insurance Code and violations of Texas Civil Practices Code.

Knox County filed an amended complaint against Blue Cross Blue Shield in the Northern District of Texas Federal Court after the insurance giant had the case removed from state District Court in Knox County. The hospital’s complaint detailed the following causes of action against Chicago based Blue Cross Blue Shield of Texas (BCBSTX):

  • Breach of contract for failing to pay agreed upon rate
  • Violation of prompt payment laws according to the Texas Insurance Code
  • Improper recoupment from a provider in violation of Texas law
  • Retaliation
  • Business disparagement

On August 16, the late Bobby D. Burnett, Judge of the 50th State District Court, entered a temporary restraining order on BCBSTX which included the following findings of fact:

  • Blue Cross Blue Shield has willfully and wantonly undertaken acts to secure funds which do not belong to them;
  • Blue Cross Blue Shield engaged in slanderous activities;
  • Blue Cross Blue Shield willfully and wantonly breached a duty of care;
  • Blue Cross Blue Shield willfully and wantonly violated insurance regulations of the state of Texas;
  • The Court deems these acts to be willful conduct of fraud.

About Knox County Hospital District:

Knox County Hospital District provides healthcare services for residents of Knox County and surrounding areas. The hospital district offers a wealth of medical services, including 24-hour emergency care, advanced radiology services, a clinical laboratory, physical therapy, patient education and more. The Knox County Hospital is a 25-bed acute care critical access facility located in Knox City, Texas which is 78 miles north of Abilene. The District also operates two rural health clinics, an outpatient retail pharmacy, home health, emergency medical services (EMS), a nursing home and durable medical equipment (DME) services.

Contact: Chuck McDonald 512-658-5958

Mcdonaldpr.charles@gmail.com

KNOX COUNTY HOSPITAL DISTRICT FILES RESPONSE TO BLUE CROSS IN FEDERAL COURT

FOR IMMEDIATE RELEASE

(Wichita Falls, TX, September 30, 2019) – The Knox County Hospital District has filed an amended complaint against Blue Cross Blue Shield of Texas (BCBSTX) in the U.S. District Northern District of Texas Wichita Falls Division which details the following causes of action against BCBSTX:

  • Breach of contract for failing to pay agreed upon rate
  • Violation of prompt payment laws according to the Texas Insurance Code
  • Improper recoupment from a provider in violation of Texas law
  • Retaliation
  • Business disparagement

The insurance giant steadfastly refuses to pay more than $21 million in unpaid insurance claims owed to the Knox County Hospital District since 2017. In an effort to avoid a trial in front of a Knox County jury, BCBSTX moved to have the case heard in federal court where the hospital submitted its amended complaint Friday.

“True to form, Blue Cross continues its bully pattern of delay, obstruction and stall tactics to avoid paying its debt to Knox County Hospital. We will vigorously fight their motion to dismiss the case. We are confident that the federal court find this matter deserves a full and thorough hearing in a court of law.

“Blue Cross Blue Shield of Texas is clearly in violation of Texas prompt pay statues and Knox County Hospital is due these payments that are more than two years old,” Dawson said. “We are determined to have our day court.”

On August 16, the Honorable Bobby D. Burnett, Judge of the 50th State District Court, entered a temporary restraining order on BCBSTX which included the following findings of fact:

  • Blue Cross Blue Shield has willfully and wantonly undertaken acts to secure funds which do not belong to them;
  • Blue Cross Blue Shield engaged in slanderous activities;
  • Blue Cross Blue Shield willfully and wantonly breached a duty of care;
  • Blue Cross Blue Shield willfully and wantonly violated the Insurance (regulations) of the state of Texas;
  • The Court deems these acts to be willful conduct of fraud.

BCBS stopped making reimbursement payments to Knox County Hospital in June of 2017. It wasn’t until October of 2017 that the company finally responded to inquiries by claiming it was a computer glitch. Knox County Hospital continued to treat Blue Cross Blue Shield subscribers and submit claims. Blue Cross Blue Shield continued to withhold reimbursement. The Knox County Hospital District then sought intervention from the Texas Department of Insurance which did not prove successful.

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About Knox County Hospital District:

Knox County Hospital District provides healthcare services for residents of Knox County and surrounding areas. The hospital district offers a wealth of medical services, including 24-hour emergency care, advanced radiology services, a clinical laboratory, physical therapy, patient education and more. The Knox County Hospital is a 25-bed acute care critical access facility located in Knox City, Texas which is 78 miles north of Abilene. The District also operates two rural health clinics, an outpatient retail pharmacy, home health, emergency medical services (EMS), a nursing home and durable medical equipment (DME) services.

 

 

Contact: Chuck McDonald

512-658-5958

Mcdonaldpr.charles@gmail.com

 

DISTRICT COURT HEARING POSTPONED FOLLOWING BCBS MOTION TO HAVE CASE HEARD IN FEDERAL COURT

FOR IMMEDIATE RELEASE

(Knox City, September 9, 2019) – The September 10 hearing on the Temporary Restraining Order (TRO) issued against Blue Cross Blue Shield of Texas (BCBS) by the 50th District Court of Texas has been postponed pending the BCBS effort to have the case moved to federal court.

Texas District Judge Bobby Burnett, presiding Judge in the 50th District Court of Texas issued a Temporary Restraining Order (TRO) ordering the company to pay Knox County Hospital more than $21 million in unpaid insurance claims last month. In response BCBS filed a motion in the U.S. District Court for Northern Texas, Wichita Falls Division, seeking to move the lawsuit filed against them by Knox County Hospital from state district court to a federal court, since the company is headquartered in Chicago, Illinois.

“Blue Cross Blue Shield of Texas is hiding behind its legal status in another state to claim that a Texas District Court is not qualified to hear this case,” said Kelly Dawson, the attorney for Knox County Hospital District. “Texans are qualified to pay premiums and provide care on behalf of Blue Cross, but Blue Cross doesn’t think they’re qualified to decide if the company is operating illegally when it comes to paying a local Texas hospital.”

“This legal tactic is certainly keeping in line with the company’s policy of non-payment, delay and obfuscation that the Knox County Hospital has been dealing with for more than two years,” Dawson said. “Knox County wants its day in court.”

“This latest move by Blue Cross is consistent with the company’s bully pattern of delay, obstruction and stall tactics to avoid paying claims,” Dawson said.

The Texas District Court’s restraining order was based on the following conclusions of law;

  • Blue Cross Blue Shield has willfully and wantonly undertaken acts to secure funds which do not belong to them;
  • Blue Cross Blue Shield engaged in slanderous activities;
  • Blue Cross Blue Shield willfully and wantonly breached a duty of care;
  • Blue Cross Blue Shield willfully and wantonly violated the Insurance (regulations) of the

    state of Texas;

• The Court deems these acts to be willful conduct of fraud.

The TRO against Blue Cross Blue Shield of Texas, issued on August 16th, ordered the company to allocate the funds owed to Knox County Hospital within 24 hours. Blue Cross Blue Shield has failed to comply with the TR O.

“It is no wonder that Texas leads the nation in rural hospital closures when we have insurance companies bullying hospitals by withholding funds. Small rural hospitals simply cannot survive years of nonpayment,” added Dawson.

Blue Cross Blue Shield of Texas stopped making reimbursement payments to Knox County Hospital in June of 2017. It wasn’t until October of 2017 that the company finally responded to inquiries by claiming it was a computer glitch. Knox County Hospital continued to treat Blue Cross Blue Shield subscribers and submit claims. Blue Cross Blue Shield continued to withhold reimbursement.

The Knox County Hospital District then sought intervention from the Texas Department of Insurance which did not prove successful.

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About Knox County Hospital District:

Knox County Hospital District provides healthcare services for residents of Knox County and surrounding areas. The hospital district offers a wealth of medical services, including 24-hour emergency care, advanced radiology services, a clinical laboratory, physical therapy, patient education and more. The Knox County Hospital is a 25-bed acute care critical access facility located in Knox City, Texas. The District also operates two rural health clinics, an outpatient retail pharmacy, home health, emergency medical services (EMS), a nursing home and durable medical equipment (DME) services.

About Knox County:

Knox County is located approximately 120 miles west of Lubbock. It has a population of nearly 4,000 according to the 2010 census. The county seat is Benjamin, Texas.

Contact: Chuck McDonald 512-658-5958 Mcdonaldpr.charles@gmail.com

Texas Judge orders Blue Cross Blue Shield of Texas to pay Knox County Hospital $21 million in past due billing

FOR IMMEDIATE RELEASE
August 20, 2019

(Knox City August 20, 2019) – A Texas District Judge issued a Temporary Restraining Order (TRO) against Blue Cross Blue Shield of Texas and ordered them to pay more than $21 million in unpaid insurance claims owed to the Knox County Hospital.  Bobby Burnett, presiding Judge of the 50th District Court of Texas which includes Knox County,  ordered Blue Cross Blue Shield to pay all funds which are allocated to Knox County Hospital within 24 hours of issuing the TRO which the company received at its Chicago headquarters on August 15.  Blue Cross Blue Shield has failed to do so.

Blue Cross filed a motion in the U.S. District Court for Northern Texas, Wichita Falls Division, to have the case moved to federal court.

“The venue is irrelevant. Knox County is looking forward to its day in court – be it state or federal,” said Kelly Dawson, attorney for the Knox County Hospital District. “The fact is that Blue Cross has not complied with the restraining order issued by a Texas District Court.”

The Court’s restraining order was based on the following conclusions of law;

  • Blue Cross Blue Shield has willfully and wantonly undertaken acts to secure funds which do not belong to them;
  • Blue Cross Blue Shield engaged in slanderous activities;
  • Blue Cross Blue Shield willfully and wantonly breached a duty of care;
  • Blue Cross Blue Shield willfully and wantonly violated the Insurance (regulations) of the state of Texas;
  • The Court deems these acts to be willful conduct of fraud.

The order also noted that the hospital would suffer permanent and irreparable harm without intervention by the Court. Furthermore, the Judge found that there is a strong likelihood that the  Knox City Hospital District will prevail on the merits of its case in the 50th District Court.

“Clearly the Court recognized the enormous financial harm that could be done to the hospital if Blue Cross Blue Shield continues to withhold monies due to the hospital since 2017 and expects us to prevail in court,” Dawson said.

“It is no wonder that Texas leads the nation in rural hospital closures when we have insurance companies bullying hospitals by withholding funds. Small rural hospitals simply cannot survive years of nonpayment,” added Dawson.

Blue Cross Blue Shield of Texas, owned by Chicago-based Health Care Service, stopped making reimbursement payments to Knox County Hospital in June of 2017.  It wasn’t until October of 2017 that the company finally responded to inquiries by claiming it was a computer glitch.

The hospital continued to treat Blue Cross Blue Shield subscribers and submit claims.  Blue Cross Blue Shield continued to withhold reimbursement.

The Knox County Hospital District then sought intervention from the Texas Department of Insurance which did not prove successful.

The hospital’s lawsuit also outlines numerous slanderous allegations by Blue Cross Blue Shield that the rural hospital provider submitted fraudulent claims.

“Blue Cross Blue Shield lied about a computer glitch. They later lied that payments were forthcoming. It is the height of arrogance to slander the hospital while unlawfully withholding funds owed for more than two years,” said Dawson.

A hearing on the Temporary Injunction has been set for September 10.

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About Knox County Hospital District:

Knox County Hospital District provides healthcare services for residents of Knox County and surrounding areas. The hospital district offers a wealth of medical services, including 24-hour emergency care, advanced radiology services, a clinical laboratory, physical therapy, patient education and more. The Knox County Hospital is a 25-bed acute care critical access facility located in Knox City, Texas. The District also operates two rural health clinics, an outpatient retail pharmacy, home health services, emergency medical services (EMS), a nursing home and durable medical equipment (DME) services.

About Knox County:

Knox County is located approximately 120 miles west of Lubbock. It has a population of nearly 4,000 according to the 2010 census. The county seat is Benjamin, Texas.

More Info:

www.knoxcountyhealthcare.org