13th Court of Appeals holds no contract necessary for medical providers to sue self-insured school district
South Coast Spine & Rehabilitation PA v. Brownsville Independent School District, 13-18-00006-CV (Tex. App. – Corpus Christi, September 12, 2019)
This is a governmental immunity/contract case where the Corpus Christi court out of Edinburg reversed the granting of a directed verdict for the school district and remanded the case.
Brownsville Independent School District (BISD) is a self-insured school district which had a third-party administrator (American Administrative Group [AAG]) handle health benefit claims. South Coast Spine & Rehabilitation, PA, (South Coast) sued seeking payment for out-of-network medical services provided to twenty-seven BISD employees. Each patient executed an “Assignment of Proceeds, Lien, and Authorization,” assigning to South Coast the patient’s benefits under the Plan. South Coast submitted claims for these twenty-seven patients and AAG refused payment. South Coast also named the twenty-seven patients as defendants. BISD subsequently filed a plea to the jurisdiction which was denied, then appealed, and remanded when the appellate court held a written contract between BISD and South Coast was not required in order to establish a waiver of immunity under Tex. Loc. Gov’t Code chapter 271. On remand and trial, the trial court granted a directed verdict based on an absence of a written contract between South Coast and BISD. South Coast appealed.
The court held that it’s prior interlocutory opinion held that South Coast could sue BISD as an assignee under the Plan—a contract between BISD and its employees. South Coast Spine & Rehab. PA v. Brownsville Indep. Sch. Dist., No. 13-11-00270-CV, 2014 WL 1789546, at *3–5 (Tex. App.—Corpus Christi–Edinburg Apr. 30, 2014, no pet.). An assignee steps into the shoes of the claim holder—in this case, the patients—and is considered under the law to have suffered the same injury and have the same legal rights as the claim holder. BISD employees are free to choose their own medical providers, and BISD is obligated to pay those medical providers the employee’s assigned benefits to the extent the services are covered by the Plan. The dispositive question, then, was whether and to what extent the Plan covered the out-of-network services provided by South Coast. Based on the language in the Plan, it specifically covers out-of-network providers to a certain extent. South Coast only sought from BISD the amount generally paid to out-of-network providers for covered services—60%. The court therefore reversed the directed verdict and remanded.
If you would like to read this opinion click here. Panel consists of Justices Benavides, Hinojosa, and Perkes. Memorandum opinion by Justice Perkes. The attorney listed for South Coast is Keith Gilbert. The attorney listed for BISD is Baltazar Salazar.
