TX hospitals can seek Medicare funds in state court

A group of Texas hospitals frustrated by the collapse of their billing contractor have gotten permission to pursue their claims against the Aetna in state court. Hospitals involved include Christus Health Gulf Coast, Christus Health Southeast, HCA Gulf Coast Division, Memorial Hermann Hospital System and Baptist Hospital of Southeast Texas.

The group of Houston-area hospitals were stuck with nearly $14 million in unpaid service fees in the late 1990s when North American Medical Management of Texas (NAMM) fell apart financially. The hospitals first sued NAMM, but when the NAMM was placed in conservatorship by the state Department of Insurance, the hospitals turned to Aetna, which it claimed was ultimately responsible for the fees under Texas law.

Originally, the hospitals pursued the claim in state court, but the case was thrown out and sent to federal court, on the logic that the case was governed by the federal Medicare Act. That wasn't great for the hospitals, because it meant that the hospitals would have to pursue 6,000 individual claims through a federal administrative process. Now, however, the Texas Supreme Court has said that the hospitals can go back to state court.

To learn more about the case:
- read this Modern Healthcare article