(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

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