(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.


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

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