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July 16, 2021

Houston Jury Awards Emergency Room Doctors $19.1 Million in Out-of-Network Reimbursement Dispute

Author(s): Leslie Schafer

On June 24, 2021, a jury in Harris County, TX awarded two emergency care physician groups $19.1 million in damages for underpayment of healthcare claims by insurer Molina Healthcare of Texas, Inc. I was a testifying expert on behalf of the plaintiffs: ACS Primary Care Physicians Southwest, PA & Emergency Services of Texas, PA v. Molina Healthcare, Inc. and Molina Healthcare of Texas, Inc., No. 2017-77084, (Harris County, Texas, 113th Judicial District). ACS and EST sued Molina for underpaying more than 13,000 out-of-network claims for reimbursement between 2016 and 2019.

ACS & EST v. Molina was the first trial in the nation to assess the usual and customary rate of reimbursement for out-of-network emergency services covered by Affordable Care Act (“ACA”) health plans. Unlike other physicians, emergency room physicians are required by law to treat any patient who enters the emergency department. The Emergency Medical Treatment and Labor Act of 1986 (“EMTALA”) mandates that hospital emergency departments screen, stabilize or transfer every patient who seeks emergency care, regardless of insurance status or ability to pay. Therefore, the Texas Insurance Code requires insurance companies to reimburse emergency services at either a contracted rate or a usual and customary rate if the services were provided out-of-network.

Molina argued that the usual and customary rate for ACA plans is the rate at which Medicare reimburses providers. ACS and EST argued that ACA health plans are commercial, not government and that claims should be reimbursed at billed charges or the commercial market rate. On an aggregate basis, similar out-of-network insurers paid about $1,042 per claim for which Molina paid only about $151. The jury found that Molina knowingly engaged in unfair or deceptive practices when underpaying ACS and EST.

COVID provided unique trial experiences. First, in order to accommodate social distancing, jury selection took place at NRG Energy Stadium in Houston (home to rodeo and the Houston Texans football team). Then, although the other witnesses and I testified in person in the courtroom, the judge allowed the public to watch all of the testimony through Zoom to support COVID restrictions.

Read more at: AZA Law and LAW360.

Services: Damages
Industries: Healthcare, Insurance

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