A federal district court in Texas has ruled that the legislature did not create a private right of action against insurers under the state's "Emergency Care Statutes."
The Case
Apollo MedFlight, LLC, sued BlueCross BlueShield of Texas, arguing that it violated Texas Insurance Code ("TIC") Sections 1271.155, 1301.0053, and 1301.155, known collectively as the "Emergency Care Statutes," for failing to pay for emergency care provided by out-of-network providers at the usual and customary rate.
Apollo also alleged that BlueCross had violated TIC Section 541.060 for engaging in unfair settlement practices by violating Sections 1271.155, 1301.0053, and 1301.155.
BlueCross moved to dismiss those two claims. It argued that the Emergency Care Statutes did not create a private right of action by which Apollo could sue BlueCross, and that Apollo did not have standing under Section 541.060 to sue BlueCross.
The District Court's Decision
The district court granted BlueCross' motion.
First, the district court held that the Emergency Care Statutes did not create a private right of action, reasoning that they did "not clearly express a legislative intent to create such a right."
Next, the district court agreed that Apollo's claim under Section 541.060 also had to be dismissed.
It explained that Section 541.060 prohibited the failure to attempt in good faith to effectuate settlement where the insurer's liability had "become reasonably clear" with respect to "a claim by an insured or beneficiary." The district court added that if an insurer's liability could be established, a person who sustained "actual damages" had a private right of action against violators of Section 541.060.
The district court then ruled that because Apollo had no cause of action against BlueCross for violations of Sections 1271.155, 1301.0053, and 1301.155, BlueCross could not be liable to Apollo under Section 541.060(a)(2)(A).
Simply put, the district court concluded that because BlueCross lacked liability to Apollo, it lacked standing to pursue its Section 541.060 claim and its claims had to be dismissed.
The case is Apollo MedFlight, LLC v. BlueCross BlueShield of Texas, No. 2:18-CV-166-Z-BR (N.D. Tex. Oct. 4, 2019). Attorneys involved include: For Apollo MedFlight LLC, Plaintiff: Jeff A Cody, LEAD ATTORNEY, Norton Rose Fulbright US LLP, Dallas, TX; Alex Lee Yarbrough, Thomas C Riney, Riney & Mayfield LLP, Amarillo, TX; Andrew Christian Cookingham, Jennifer Rudenick Ecklund, Thompson & Knight LLP, Dallas, TX. For BlueCross BlueShield of Texas, a Division of Health Care Service Corporation, Defendant: Sarah M Cummings, LEAD ATTORNEY, Reed Smith LLP, Dallas, TX; Alexandra Lucas, PRO HAC VICE, Reed Smith LLP, Chicago, IL; Amir Shlesinger, PRO HAC VICE, Reed Smith, Los Angeles, CA.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].