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Blue Cross Blue Shield ordered to pay $108.3M to two Milam County hospitals

Little River Healthcare argued the BCBS violated state insurance code regarding deceptive practices, breached "various contracts" and more.

MILAM COUNTY, Texas — Blue Cross Blue Shield has been ordered to pay more than $108.3 million in damages and attorneys’ fees to Little River Healthcare, which operated Milam County hospitals in Rockdale and Cameron until the facilities went bankrupt in 2018.

An independent arbitrator found that BCBS had violated its contract with the Milam County hospitals and failed to meet the Texas Prompt Pay Statutes.

According to court documents, the arbitration between BCBS and Little River Healthcare was to determine who had breached contracts between the two, as both parties made similar claims.

Little River also argued the insurance company violated state prompt payment laws "with respect to timely payment, recoupment, and auditing of Little River's claims for payment..." and violated the state insurance code provisions regarding deceptive insurance practices.

In addition to a breach of contract claim, Blue Cross Blue Shield argued that Little River committed fraud with respect to billing for laboratory services and engaged in fraudulent inducement.

The independent arbitrator, Justice Harriet O'Neill, issued the award May 6, 2020, which includes Little River's contractual claims and Prompt Pay Claims along with attorneys' fees, interests and costs.

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