Texas hospital, BCBS ordered to arbitrate in $21M lawsuit

A judge ordered Knox County Hospital District in Knox City, Texas, and Blue Cross and Blue Shield of Texas to arbitrate most of a $21 million lawsuit outside of court.

In a Jan. 13 news release, the hospital said U.S. District Judge Reed O'Connor ordered both parties to attempt to arbitrate most of the lawsuit, but stayed some portions of the suit pending the arbitration outcome. By staying some portions of the lawsuit, Knox County Hospital District can pursue any legal claims against BCBS that aren't resolved in arbitration.

In the lawsuit, Knox County Hospital argued BCBS of Texas owed the hospital unpaid claims. Court replies from BCBS of Texas argue that the hospital actually owes the insurer money, and isn't entitled to payment on disputed claims. BCBS of Texas argues it was billed for patients who hadn't actually accessed services at Knox County Hospital.

"We're pleased to have the option of coming back to court if we are unable to resolve some of the serious financial hardships that have been imposed on the Knox County Hospital. We want the citizens of Knox County to be fully covered before this [issue] is resolved," said Kelly Dawson, attorney for the hospital, in a news release.

BCBS of Texas told Becker's the insurer can't comment because of pending litigation. 

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