Health Systems

Blue Cross-Knox City Conflict May Be Going to Federal Court

Blue Cross Blue Shield of Texas is hoping to move the legal battle with Knox County Hospital District to federal court, and the temporary restraining order hearing scheduled for September 10 has been suspended.

After 50th District Court Judge Bobby Burnett issued the TRO ordering BCBS to pay Knox County Hospital more than $21 million in what they allege are unpaid insurance claims, BCBS filed a motion in U.S. District Court for Northern Texas in Wichita Falls to move the case to federal court because BCBS of Texas is owned by Health Care Services Corporation in Chicago.

“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 via release. “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 via release. “Knox County wants its day in court.”

Knox County Hospital is a 25-bed acute care hospital that serves Knox County, 200 miles west of Dallas. Their lawsuit claims that BCBS stopped making reimbursement payments in June 2017  and responded three months later to say the issue was a technical glitch. The hospital says BCBS continued to withhold payment even as the hospital treated its plan members.

“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 via release.

Learn more about the case and read a statement from Blue Cross Blue Shield of Texas here.


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