Case Study

Successfully defending freestanding emergency departments

We won summary judgment on all claims by a national health insurer against a Houston-based hospital. The insurer was seeking to recover $15 million in claims payments for emergency care, alleging that it had been defrauded because freestanding emergency departments were not “hospital-based” for purposes of claim reimbursement.

The case was a David v. Goliath brought against our client by one of the nation’s leading insurers, mirroring a number of similar cases  concerning a Texas law that allows freestanding emergency departments affiliated with hospitals to bill as hospital-based facilities.  The practical effect of this law requires insurers to pay for emergency treatment at the reasonable and customary rate whether or not the facility is “in network.”

The case was a David v. Goliath brought against our client by one of the nation’s leading health insurers.

Our lawyers successfully invoked  Buckman Co. v. Plaintiffs Legal Committee, also known as  Buckman  preemption, to argue that the insurer’s claims—which were based on alleged misrepresentations to Medicare—were precluded by our client’s Medicare designation as a provider-based entity (PBE). While previous cases brought by other insurers reached confidential settlements, this one resulted in a summary judgment against the insurer issued by the trial court based on no evidence and statute of limitations grounds.

When the insurer appealed to the First Court of Appeals in Houston, the Court of Appeals chose to uphold the trial court’s summary judgment, affirming that the insurer was time-barred from collecting payments. The insurer then filed a petition for review with the Supreme Court of Texas, but the Supreme Court denied review. The final result was a complete victory for our client on a summary judgment that was affirmed on appeal.