Milam County: Blue Cross ordered to pay millions in suit involving hospitals

Blue Cross Blue Shield of Texas has been ordered to pay more than $108 million in damages to a company that owns two bankrupt Central Texas hospitals. (MGN/file)
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MILAM COUNTY, Texas (KWTX) The U.S Bankruptcy Court for the Western District of Texas, based in Waco, has ordered Blue Cross Blue Shield of Texas to pay more than $108 million in damages to a company that owns two bankrupt Central Texas hospitals.

“Blue Cross Blue Shield of Texas (BCBS) has been ordered to pay more than $108.3 million in damages and attorneys’ fees to Little River Healthcare, which had operated Milam County hospitals in Rockdale and Cameron, until the facilities were forced into bankruptcy in 2018,” according to a news release issued Wednesday by Chuck McDonald, principal at the McDonald Public Relations Group which represents the healthcare company.

McDonald went on to explain: “An independent arbitrator, former Supreme Court Justice Harriet O’Neill, found that BCBS had violated its contract with the hospitals and failed to meet the Texas Prompt Pay Statues,” and “The judge also awarded attorney’s fees incurred by the hospitals.”

“Systematic violations of the prompt payment code, as with this case, is a death sentence for rural providers, they are already struggling and when insurance companies fail to pay claims, they can’t keep their doors open” said Kelly Dawson, attorney for the Knox County Hospital District, which also is suing BCBS for the same indiscretion.

“There are no secrets in Bankruptcy Court. The record clearly shows that Blue Cross simply refused to pay its bills,” she said.

“Knox County has suffered every indignity from Blue Cross that the hospitals in Rockdale and Cameron had to deal with.

“We have also been ignored by the Texas Department of Insurance which seems more intent on protecting the big insurance companies than it does in regulating them.”

The Knox County Hospital District is attempting to raise awareness among Texas elected officials of the judgement rendered against BCBS of Texas in the Little River case because the state can ill afford to lose any more rural health care providers as it addresses the COVID 19 pandemic.

Earlier this year the Knox County Hospital was named to the nation’s Top 100 list for Rural and Community Hospitals – the second time it has been honored as one of the nation’s elite rural facilities in the last four years.