Texas Supreme Court rules against Aetna

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The Texas Supreme Court has ruled that hospitals providing Medicare-related services can seek reimbursement in state court without being forced to pursue costly and time-consuming reviews.

Christus Health Gulf Coast; Christus Health Southeast Texas, Gulf Coast Division; Memorial Hermann Hospital System; and Baptist Hospitals of Southeast Texas are the five Texas hospitals opposing Aetna.

In the late 1990s, the hospitals contracted with North American Medical Management of Texas (NAMM), which received payments from NYLCare, an Aetna-owned subsidiary, to provide healthcare services under the Medicare+Choice program. The program was established to provide Medicare beneficiaries with a wider range of health plan choices.

In the state court lawsuit, the hospitals alleged that NAMM mismanaged its accounting and, eventually, ceased paying the hospitals for their services. The hospitals claimed that Aetna owed them approximately $14 million in unpaid service fees.

Although the initial suit was dismissed and a Texas court of appeals affirmed the trial court decision, the Supreme Court ruling reversed the court of appeals decision and remanded the case to the trial court to determine Aetna's disputed contractual obligations.